Everybody wants to save money on their mortgage!
A new home
buyer is especially diligent when shopping for the best mortgage.
They make
the effort to:
- find out the options
- compare rates and costs
- compare flexibility
This home buyer then moves into their new home and their
mortgage becomes something they don’t think about very often. They might have a growing family and an
ambitious career. In the meantime, the
mortgage payments are happening on automatic pilot.
Eventually their lender sends them a letter to let them know
that their mortgage is coming up for term renewal. That borrower is faced with some decisions to
sort out.
1.
Should
they do things the “easy” way and sign the offer from their current lender?
2.
Should they ask their lender for a better rate?
3.
Should they move their mortgage to another
lender?
The answer? You guessed
it! Don’t Renew! Renegotiate!
1.
Call your lender and ask them for their best
offer and ask them to send it to you in writing.
2.
Work with a broker who has access to many different lenders so you can better assess
your options. Even if that broker has
not worked with you before, they can still help you sort out your renewal.
3.
Have the broker compare options for you including
the option from your current lender.
This analysis will include any possible costs for moving the mortgage
and list possible advantages to moving to another lender.
4.
Then decide.
It will cost you nothing to ask and it could save you thousands of dollars.
Remember the effort when you first bought
your home? Well you only need a small
fraction of that effort to ensure you get the best mortgage when
renewing your mortgage term.
It is not unheard of to have a mortgage renewal offer of a whopping 1% higher than competitive rates. On a mortgage of $400 000 that would cost
approximately $4000 extra per year! I
have also seen decent renewal offers where it was clear that the client was
fine to stay where they were.
No matter what your final decision, it pays to consult with
a mortgage broker before you sign the "easy "offer from your current lender. Go ahead and make that call.
