Renewing Your Mortgage
When you bought your home, you probably signed a mortgage agreement that will remain in effect for a certain period of time, called the term. When your mortgage term comes to an end, you will have to either pay off your mortgage or renew it for another term. This is a good opportunity to reassess what you need in a mortgage and re-evaluate your options such as an open or closed term and your prepayment options.
Many Canadians renew their mortgages like they renew their newspaper subscriptions: the renewal notice comes in the mail, they sign on the dotted line, and that’s that.
But as a homeowner you should be more discriminating. A lot can change between the time you purchased your house and your first renewal — everything from interest rates, new mortgage products, your job and family situation can change dramatically.
Plan ahead – your renewal notice will arrive a month before the actual renewal date, but we suggest that you start thinking about renewing your mortgage about four months before your renewal date, so that we can make you aware of the options available to you and lock in a rate for you.
You may find that negotiating different terms or changing lenders not only saves you money but could shorten the life of your mortgage substantially.