Mortgage Renewal Effort
“Are You Putting In The Necessary Effort Before Signing Up For A Mortgage Renewal With Your Existing Lender?”
When you have a mortgage term coming do, what do you typically do?
If you’re like most Canadians, the answer would be very little which is hard to understand considering the potential amount of money involved and its impact on your cash flow which directly influences your life style.
Studies have shown that more than half of mortgage holders are likely to renew their mortgage with their current mortgage provider without first making sure that their new offering was competitive in the market place.
There is nothing wrong with being loyal to a lender and vise versa, provided that the business relationship is equally good for both parties.
And because mortgage lenders all know through their own surveys and data analysis that the majority of their mortgage holders review, there is no incentive for them to offer a best in market renewal option or even one that’s close.
That being said, if you a mortgage lender has room to move in their rate and you are prepared to leave for a better one, they are likely going to improve their offering to you to retain your business.
But that also speaks to you understanding the options that are available to you in the market place and how the process works.
Whether it seems logical or not, if you want to stay put with your current mortgage provider and still want to be paying a competitive interest rate, then you’re going to have to do at least some market research, or get someone like an independent mortgage broker to do it for you.
With knowledge in had, the same knowledge that your mortgage lender already holds, there is more likely going to be the opportunity for a fair and equitable deal constructed that benefits both parties.
And also remember that there is a certain level of precision required with these numbers so you also need to pay attention to the details as close enough will likely take more money out of your pockets than you may be aware of.
Take the example of a $300,000 mortgage. If you are able to get your current mortgage lender to reduce their mortgage renewal offering by 1/2% based on competitor offerings, this basically increases your annual cash flow by approx. $1,500 to spend with as you please, including paying down the principal on your mortgage.
Better this amount go into your pocket than the lender’s pocket.
Once again, nothing wrong with staying put with a lender, provided that its equitable to do so.
About the Author Joe Walsh
I'm a Toronto Mortgage Broker that arranges mortgage solutions on residential and commercial real estate property. With over 30 years of mortgage financing experience, I'm able to quickly assess your financing requirements and provide relevant solutions for your immediate consideration. Joe Walsh Google+ YouTube Channel