While most homebuyers spend a lot of time, and expend a lot of effort, in shopping for an initial mortgage, the same is generally not the case when looking at mortgage term renewals. Nearly 60% of Canadian borrowers simply sign and send back the renewal that is first offered to them by their lender without ever shopping around for a more favorable interest rate. Lenders know this and take it into account when offering renewal rates to their clients. Not taking the time to properly consider all your options at renewal could cost you thousands of dollars annually.
In the majority of cases, your existing lender will offer you a moderate discount over the “posted rates” and all you have to do is sign the letter you receive by mail. Sounds easy, but wouldn’t you rather save yourself thousands of dollars?
In fact, sometimes I can even negotiate with your existing lender to save you money! If your bank isn’t competitive, I have access to over 40 other lenders that may be a good fit for you. You dont need to move your banking over to them – just provide a void cheque form your existing account for the mortgage payments to come out from.
If you are renewing at a rate that is even 0.20% higher than my best rate you are missing out on $1,000 in savings for every $100,000 in mortgage (over a 5-year term)!
The time to start the process for obtaining the best rate is 4-6 months prior to your mortgage coming up for renewal, as that is how long rates can be held for. Is it worth the two minutes of your time to compare rates in order to save thousands of dollars in interest on your renewal?