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Renewing Your Mortgage - 5 Points To Consider

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Don't just hit the
'Auto-Renew' option your lender sends you
While it is the most convenient way to renew your mortgage, it may not be the best.

Here are 5 questions to ask yourself before you renew your mortgage.
Is there a chance I might move in the next 3, 4 or 5 years?
Selling your home during the mortgage term will mean 'breaking' the mortgage agreement. 

Some lenders will charge exhorbitant fees to do so.
If there is even a chance that you might have to sell your home, make sure to ask your lender what those fees might be.

I've seen cases where the lender charged Tens of Thousands of dollars.

Reasons you might need to move could include:
  • Family growth
  • Job transfer to another city
  • Kids moving out
Do I really need that CashBack being offered by the lender?
Some lenders offer 'free' money cashback for renewing with them.

Spoiler Alert:  There is no such thing as 'free money'
Lenders don't give away money!  They're not in the business to give it away.

So this free money comes with strings. 

For example, check the mortgage rate being offered.  Most often the rate is a little higher, just enough to recoup that 'free money' over the term of the mortgage.

Another pitfall:  If you do have to break your mortgage early  (see point #1) you may be required to repay the entire amount, even if you break it a few days early.
Would I like to do some renovations to my home?
At today's super-low rates, taking out a little equity from your home is a great way to pay for upgrades and renovations.
Keeping your home in tip-top shape not only improves your enjoyment of the home, but also increases it's value.

Renovations could include:
  • Fresh paint inside and out
  • Upgrading the furnace/ac
  • A new roof
  • Upgrading electrical (knob and tube?)
  • Adding a deck or sunroom
If you are going to tackle any of these jobs, make sure you get good reputable contractors to do the work.
Avoid the 'Kijiji-Kontractor' and call me for a referral.

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Am I carrying balances on high-interest cards or loans?
Similar to the previous point, you could use the equity in your home to pay off some credit cards or loans. 

These savings could be huge over time.
Can I top up my RRSP's?
Taking out some of that home equity at, for example, 2% rate, makes a lot of sense if you buy an RRSP with a similar (or better) return PLUS a 30% tax refund.

Remember, one lender rarely fits ALL your needs!
These days, home owners have a huge variety of options when it comes to mortgage lenders.

Your current mortgage may have been a great choice when you bought the home, but is it still?
Today, home owners have many options, including among others

  • Mortgage Brokers
  • Banks
  • Credit Unions
  • Private Lenders

To read more about those options, check out this article.

Mortgage Options for Home Owners
Your home is probably your most valuable asset.
This information was produced with the help of my friend, Mike Schroeder of Mortgage Architects
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