Homebase Mortgages

What is Mortgage Renewal?

\"mortgageMortgage renewal is a hot topic for Toronto mortgage brokers, but what is it? When your mortgage runs out, you’ll have one of two choices: extend/“renew” your mortgage, or to pay up in full. Since most of us can’t get that much money up on the spot (which is why most of us got a Canadian mortgage in the first place) we have to renew. What you may not know is that you don’t have to renew with your present lender; you can make them renegotiate the terms of your agreement or you can find another lender altogether. Here we’re going to go over everything you need to know about mortgage renewal.

What is the Difference Between Terms and Amortization?

Most people make the mistake of not knowing the difference between mortgage terms and amortization. You’ll often have a 25 year amortization period (it was 30 but the mortgage rules have changed to a max of 25 years), but this doesn’t mean you have 25 years to pay off your loan in full; this is where mortgage terms come into play. Say you have a 25 year period for your mortgage but you have a 4 year (common) mortgage term. When that 4 years is over, you could end up with much higher interest rates or you could be on the hook for the full amount. This is when you need to speak with one of our Toronto mortgage brokers.

You probably already have a mortgage, and there’s little you can do about that now. But when it comes up for renewal, you’ll be able to renegotiate or find a better mortgage lender who can help you get the right Canadian mortgage. You can’t do this without a Toronto mortgage broker, so let us help you find the right mortgage for you!

Save Money with Renewal

Saving money with mortgage renewal means understanding how the process works. The difference between terms and amortization is a good example, but you’ll also need to know about penalties too. Penalties like pre-payment (paying EARLY) and late payment penalties will affect how much interest you get over the life of your loan. Caps on VRM or ARM (variable/adjustable rate mortgages) like lifetime caps and annual caps will keep your interest rates low and will help you know exactly how high or low things are going to wind up being.

Just because you get a mortgage renewal letter in the mail doesn’t mean you have to sign it. Talk to one of our Toronto mortgage brokers and make sure you’re getting the deal that’s best for you. Just because a renewal offers a 0% introductory rate doesn’t mean it will stay that way for long, and you’ll want to know for sure that you’re getting a great rate that sticks. We’ll be able to help you find the right mortgage renewal solution for your needs, at a price that’s right and with terms that fit your lifestyle. 

Homebase Mortgages