Is your Mortgage up for Renewal this Year?
Here are some tips to ensure the process goes smoothly and you get the best rate available(that suits your own financial situation).
Start Early: We have a system that reminds clients 6 months, 3 months and 1 month in advance via email about an upcoming renewal. We also try to followup with a phone call in case the email is lost. Even with that in place we are see people wait until the last minute to contact us. By starting to talk about things 6+ months out we can ensure you will get the lowest rate available as many lenders will allow us to ‘lock-in’ a rate 120 days at a time. Since COVID, most lenders are understaffed so a renewal can normally take 4 weeks from start to finish, sometimes longer! There are ways we can help clients at the last minute but it may mean taking an OPEN term with your current lender at a higher rate which can be unnecessary. Start Early and Save More!
Fixed vs Variable: In our history in the mortgage business we have never seen the BoC increase rates the way they have over the last year. This means Variable and Short term rates are actually HIGHER than Long Term rates. The thinking is rates will come down in the near future, but keep in mind by taking a Variable right now you are paying a premium to ‘bet’ that rates will come down vs locking into a longer term(3/4/5yr) rate that is some times up to 1% lower. While rates may come down and this theory could work out, Variable rates may not be the best option right now. For some clients the standard 5yr fixed still provides security and comfort in knowing what payment you will have for the future, while also being the LOWEST rate currently available. However, for clients looking at shorter terms we are seeing some good options on 3yrs which will give some security but also not lock a borrower in for too long. A 5 minute conversation can give you a snapshot on what the market is doing and the best options available.
Is it worth it to change lenders?: We start the renewal process with an update of your financial scenario and then can provide mortgage rate options via a quick phone call or email. We then compare what your current lender can/has offered with what is available elsewhere to decide if it’s worth taking the next step. While every scenario is unique, we usually like to see a 25bps/.25% savings to ensure your time spent transferring to a new lender results in $$$ back into your pocket. Should your current lender match/come close to the rates offered in the market, simply renew with them knowing you have the best rate available and are keeping money in your families pocket. A few minutes is all it takes to ensure your new mortgage is fair and competitive.
Banks are sneaky: We are always being asked by clients if they should renew early? The Banks like to call clients 6-12 months in advance right now and claim they will do you a ‘favor’ and lock you early before rates increase. Don’t fall for this trick! Most people will be in a much lower rate currently than what you can obtain today, so by locking in early you lose the old lower rate and start sooner with a new higher rate. If it’s happened to you, learn from it for the next time your mortgage renews. Make sure you contact Vertuity and use our simplified process to ensure you get the best rate available for your future renewal while keeping your low current rate as long as possible. AND, if you know of anyone who hasn’t used us before, feel free to pass on our contact info. We would be happy to help any of our clients friends and relatives with their mortgage needs!
Call us at 204.888.4663 or Email info@vertuity.ca