It is extremely common for Canadians to simply sign the first offer from their existing mortgage lender at maturity without researching whether there are better options out there. Options that could potentially save them thousands of dollars of interest. A 2011 survey conducted by Manulife found that almost two out of three Canadians surveyed stayed with their current mortgage provider and didn’t negotiate. Here are three things to keep in mind before you sign the first renewal offer you get.
The posted rate isn’t the best rate
Banks and other financial institutions usually start by offering you their posted rate. They sometimes offer their discounted rates to “preferred” customers. Consumers need to do a better job of educating themselves and shop around. Our professional team of mortgage agents and brokers work with over 30 financial institutions, which results in these lenders offering us the best competitive rates in the market in order to win our business. This often results in our clients obtaining a much lower rate upon renewal.
Bank or Broker?
We work with most major banks, along with many other mono line financial institutions. A survey conducted by The Bank of Canada found that using a broker can result in getting a lower rate. Part of this is due to brokers getting multiple quotes from various institutions.
Check the terms before you sign
The lowest rate may not be the best rate, therefore you should always have a professional explain and read over the terms of your mortgage to you. Ensure you have a mortgage product that allows you to pre-pay your mortgage. It is also important for you to clearly understand how your mortgage penalty is calculated.
Don’t put aside your mortgage renewal until the last minute. It is recommended that you begin shopping for a mortgage four months prior to your renewal. Contact us today and let us secure a rate for you!