Mortgage Renewal Time?...

...How can you make the best decision?
Renewing your mortgage can be a stressful and confusing process, especially if you are not prepared. Here are some things to watch out for when renewing your mortgage in order to get the best possible deal.

Don't take the first offer:
Your current lender may send you a renewal letter with an offer to renew your mortgage at the end of your term. This offer may not be the best one for you. Your lender may not give you the lowest rate or the most suitable product for your needs. You should always shop around and compare different offers from different lenders before you sign anything. You have the right to switch lenders if you find a better deal elsewhere. You should start looking for options at least four months before your renewal date.

Don't extend your amortization:
If interest rates have gone up since you got your mortgage, you may face a higher payment when you renew. Your lender may offer you a longer amortization period to lower your monthly payment. However, this means that you will pay more interest over the life of your mortgage and take longer to pay it off. You should only consider a longer amortization if you have no other option and you understand the long-term consequences. You should also look for ways to improve your financial situation before you renew, such as increasing your income, reducing your debt, or boosting your credit score.

Don't stick with the wrong product:
Your financial situation and goals may have changed since you got your mortgage. You should review your needs and preferences before you renew your mortgage and see if your current product still meets them. For example, you may want to change your payment frequency, prepayment options, portability, or debt consolidation options. You may also want to switch from a fixed rate to a variable rate or vice versa, depending on your risk tolerance and market expectations. You should look for a product that offers you the most flexibility and benefits for your situation.

Don't let your mortgage renew automatically:
If you don't respond to your renewal letter or find a new mortgage before your renewal date, your mortgage may renew automatically with your current lender. This can cost you a lot of money and hassle. Automatic renewal usually comes with open terms, which means that you can leave at any time without penalty, but also that you pay a higher interest rate than normal. You may also end up with a product that doesn't suit your needs or preferences. You should always take action before your renewal date and either negotiate with your current lender or switch to a new one.

Don't focus only on the interest rate:
When shopping for a new mortgage, it's tempting to focus on the interest rate and go for the lowest one available. However, the interest rate is not the only factor that affects how much you pay for your mortgage. You should also consider other factors such as fees, penalties, terms, conditions, features, and services. Some lenders may offer very low rates but charge high fees or impose strict penalties or limitations on their products. You should always read the fine print and understand what you are signing up for before you accept any offer.

By following these tips, you can renew your mortgage wisely and save money and time in the long run. Remember, renewing your mortgage is not just a formality, but an opportunity to improve your financial situation and achieve your goals. 
Content for this blog post has been generously provided by Karen Matthey, Mortgage Agent Level 2 at "The Mortgage Professionals" ( and was originally published in a monthly market update from Shari Doherty, Sales Representative at Re/max Finest Realty Inc., Brokerage ( in Kingston.