Mortgage Renewal – Don’t Accept Bank’s First Offer
I have been a loyal mortgage client with my bank for the past 5 years….they would only offer me there best rate upon renewal right?
WRONG….Many Canadians believe their loyalty will translate in to preferential rates when it comes time to renew, but nothing could be further from the truth. Banks know that 85% of Canadians will sign their mortgage renewal notice without even looking around to make sure they have the best rate. Why would the bank offer their lowest rate when they can offer an inflated rate without any push back? in fact many times a stranger walking in to a bank branch looking for a mortgage will get a better rate than the long term client looking to renew.
This does not have to be the case. Get in touch with your mortgage broker 3-4 months before your mortgage renews so he/she can start shopping around for the best rate. At the very least you can get a rate hold for 4 months to protect you in the case of rate increases before your actual renewal. Also take a moment to think about how your situation might change in the coming years. Will your family be growing? Will you need money for renovations or a child’s education? If so now is the time to include these changes in your mortgage. Does your bank take the time to help you plan financially for the next 5 years of your life? Probably not.
All of this being said, I do use the big banks for a large portion of my clients and really do not have anything against them. All I am saying is it is your money, manage it wisely.Your mortgage is probably the single biggest piece of debt you have so it is worth a little extra effort to make sure you are getting the lowest rate possible and the mortgage product that best suits your needs.
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