• Do you know when your current mortgage is up for renewal? Do you know what happens if you do not take active steps to renew your mortgage?  Many Canadians do not.  Unfortunately many Canadian homeowners fall into the auto-renewal trap and therefore do not take advantage of the savings inherent in securing a better mortgage rate and product.

    In 2009 ING DIRECT commissioned an Angus Reid poll and found that 40 percent of Canadian mortgage holders waited only 30 days or less in advance of a home closing (or renewing an existing mortgage), in securing a rate hold guarantee.  A rate hold guarantee is available as early as 90 to 120 days before your mortgage comes up for renewal.

    The survey noted that those with existing mortgages are the ones who could benefit most from a rate hold. The survey found that of the 64% of Canadians whose mortgages have come up for renewal 27 percent indicated they let their mortgage automatically renew. 

    Banks typically offer anything from posted rates, up to 1 percent off of the posted rate, at mortgage renewal time.  Not negotiating a better rate than what is offered or looking at alternative lenders for a best available mortgage rate and terms, means Canadians could be missing out on savings and therefore money in their pocketbook!

    So how much extra are you paying on your mortgage by simply auto-renewing? …..between $7388 and $3173.00!!

    Example:   Using $300,000.00 mortgage with a five year fixed term, amortized over 25 years, making monthly payments, the balance on your mortgage in 5 years is:

    • Current bank posted rate for 5 year term 5.39% the balance in 5 years is $26721.67
    • Negotiating 1% off of the posted rate 4.39% the balance in 5 years is $262907.22
    • Our best 5 year rate 3.69% the balance in 5 years is  $259733.35

    Posted rate vs. our best rate, you are paying $7388.32 more than you should have

    1% off of posted vs. our best rate, you are paying $3173.87 more than you should have

     What do you need to do to put that savings in your pocket when your mortgage comes up for renewal?

    Don’t wait until the mortgage renewal letter arrives in the mail box. Pay attention to your mortgage term and when it is coming up for renewal.

    • You should have received your annual mortgage statement in the mail in the past month. Look at it, when does your mortgage come up for renewal? You can usually check your renewal date online.   Make a note in your electronic calendar right now – 120 days out from the renewal date, along with my contact information.  
    • Remember you are in control of your mortgage at renewal time, not your lender. It is your opportunity to make changes to your mortgage that will save you money over the long term.
    • Work with a Mortgage Planner – We work for you to negotiate a mortgage rate and product that fits your goals and budget.  What are your future plans? Are you staying in your current home for the next 5 years? Will your financial situation change?  We will recommend a mortgage term, product and amortization is the best option for you.
    • Some lenders offer a “no-fee” refinance or  they will reimburse you some of the minimal costs associated with switching your mortgage.  By working with a mortgage planner we can switch your mortgage taking advantage of these no-fee options

     Bottom line you when it comes to renewing your mortgage, it is important to exercise due diligence.  Know what your options are! Do not simply go with the auto-renewal because you are too busy or not sure what your options are.

    One hour of your time with a mortgage planner is money in YOUR pocketbook and long term savings on your mortgage.  

    Now go find your renewal date and mark it in your Outlook calendar .. 🙂