Renewing Your Mortgage Should Save You Money

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renewing your mortgage should save you moneyThe large majority of Canadians who have renewed their mortgage in the past year saw their rate drop. Renewing Your Mortgage Should Save You Money!

A lower interest rate means that the interest portion of your payment goes down, other things being equal. This reduction in interest allows homeowners to either accelerate principal payments or it can provide more disposable income.

Either way, it’s good for the Canadian economy. Increased payments mean an increase in home equity and a reduction in debt levels. An increase in disposable income means a boost to the economy in the form of increased spending, or it could mean an increase in savings or debt reduction. Either way, it’s a good thing.

Many people blame the current low interest rate environment for fueling price increases in the real estate market, especially in larger cities like Toronto. However, it might well be the constant calls for rate increases that are in fact responsible for driving buyers to ‘get into the market while they can’.

 

The reported average rate negotiated by home buyers this year was 2.89% as opposed to 3.25% six months earlier

 

Mortgage Renewal

If you are renewing your mortgage in the next six months, you should end up with a lower interest rate provided you don’t blindly sign the offer to renew that comes in the mail.

Many people take the easy route and just sign on the dotted line for another term when they receive their mortgage renewal statement.

People who do this without reading the fine print usually get switched into a higher rate mortgage without knowing and end up missing out on the lower rates that are available had they only shopped around.

 

Renewing Your Mortgage is an opportunity to review all of the following:

  • Mortgage rate
  • Your monthly payment
  • Term of your mortgage (how long this new mortgage agreement is for)
  • Amortization period (how long before the house is paid for)
  • Mortgage principal (do you need to free up cash from your equity)

Mortgage renewal time is a chance to make a big improvement in your financial situation just by moving into a better mortgage product.

Don’t fall asleep at the switch. If your mortgage is coming up for renewal in the next six months, email me marianne@option1financial.com or call me at (800) 722-7172 before you sign your renewal offer! You could be very pleasantly surprised at how much money you can save.

 

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Renewing Your Mortgage Should Save You Money
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Renewing Your Mortgage Should Save You Money
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Anyone who is renewing a mortgage in the next six months is likely to end up with a lower interest rate provided they don’t blindly sign the offer to renew that comes in the mail.
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Marianne Lalonde

About the Author:

Marianne Lalonde is the owner of Option1 Financial. She is a Level II Independent Insurance Broker. Over the past 30 years, Marianne has provided financial advice to thousands of people in Ontario, Canada.
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Comments

  1. Singh  December 26, 2015

    I agree. We’ve seen threats of increasing interest rates spark bidding wars as people want to get into a house while they can afford it.

    reply
  2. Seth  December 23, 2015

    You’ve always got to read the fine print. A lot of people don’t bother reading the renewal notice because the word ‘renewal’ makes them think it’s for the same rate they had before.

    reply
    • Marianne Lalonde
      Marianne Lalonde  December 25, 2015

      I agree Seth. The fact that it’s called a renewal is what leads a lot of people to think they’re just agreeing to extend or renew their existing mortgage – that’s rarely the case.

      reply
  3. Harry  September 6, 2015

    I wish I had come across this post last year. Just renewed with my existing lender and got trapped into a higher rate!

    reply
  4. Kristy  September 5, 2015

    Good information for homeowners to bookmark.

    reply
  5. Sasha  July 24, 2015

    How do you know whether or not it’s a good idea to remortgage a bit early?

    reply
    • Marianne Lalonde
      Marianne Lalonde  July 27, 2015

      You would need to take a look at what penalty you face for cancelling your existing mortgage Sasha and compare that to how much you stand to benefit by taking a new mortgage. If the penalty isn’t too severe and you stand to benefit, it makes sense to go ahead and remortgage.

      reply
  6. Elisha  June 3, 2015

    I need to to thank you for this! I definitely enjoyed every little bit of it.
    I have got you bookmarked to look at new things you post_

    reply
  7. Sherrie  May 30, 2015

    Hi there, just wanted to say, I liked this blog post. It was practical.
    Keep on posting!

    reply
  8. Eric  May 20, 2015

    Thanks Marianne for sharing a superb content with us. 🙂

    reply
  9. Gabriel  May 9, 2015

    Helpful article on renewing your mortgage. I’m going to bookmark this page for my next renewal.

    reply
    • Marianne Lalonde
      Marianne Lalonde  June 5, 2015

      Thanks Gabriel. I’m sure we can come up with a few good options for you!

      reply
  10. Bergeson  May 4, 2015

    Great blog article.Really thank you! Keep writing.

    reply
  11. Martin  February 20, 2015

    Why would you just renew a mortgage with inferior terms to the original one?

    reply
    • Marianne Lalonde
      Marianne Lalonde  February 21, 2015

      It appears that many of these people don’t take the time to read the offer to renew Martin. I think the word ‘renew’ leads them to assume it’s for the same terms.

      reply
  12. Pendexter  February 10, 2015

    I absolutely love your site.. Pleasant colors & theme. Did you build this site yourself? I’m planning to create my own personal blog and want to find out what the theme is called. Thank you!

    reply
    • Marianne Lalonde
      Marianne Lalonde  February 12, 2015

      Glad you like the site Pendexter. The theme is called ‘Karma’ and I paid a developer to set it up for me. It is something you can do yourself if you know a bit about wordpress, but the pros can clean up some of the bloat to help the site load a bit more quickly.

      reply
  13. Ladonna  February 8, 2015

    Great post. I know I’ve been caught up in this way once. It’s a costly way to learn a lesson.

    reply
    • Marianne Lalonde
      Marianne Lalonde  February 8, 2015

      Sorry to hear that Ladonna. I’m sure you won’t let it happen again. Feel free to call us if you would like some free advice.

      reply
  14. Oran  February 5, 2015

    Great post! I agree it’s something we should all spend a bit more time reviewing our options.

    reply
    • Marianne Lalonde
      Marianne Lalonde  February 8, 2015

      You’re right Oran. It only takes a few minutes to make one or two calls that could save you a lot of money!

      reply
  15. Rene Perras  January 31, 2015

    Very good article.

    reply
  16. C. Coover  January 27, 2015

    Thanks a lot for the article. Really Great.

    reply
  17. Rafael  January 26, 2015

    I wish I had paid more attention to my renewals in the past. I sure will going forward!

    reply
    • Marianne Lalonde
      Marianne Lalonde  January 27, 2015

      Good to hear Rafael. Many people do exactly as you did and simply sign the renewal.

      reply
  18. Yetta  January 9, 2015

    It’s great that you we are getting ideas from this article as well as from comments being
    made here.

    reply
    • Marianne Lalonde
      Marianne Lalonde  January 9, 2015

      Thanks Yetta, glad you are finding the post useful in some way.

      reply
  19. Berenice  January 2, 2015

    Great article!

    reply
  20. James  December 31, 2014

    Nice post! There are so many variables in mortgages that it’s easy to be mislead into thinking you’re getting a good deal.

    reply
    • Marianne Lalonde
      Marianne Lalonde  January 1, 2015

      Abolutely James. There are many variables in mortgage products that can be overlooked, ranging from steep penalties to locking in all your equity. It’s important to consult with a mortgage professional that has your best interest at heart to make sure you don’t get an inferior product.

      reply
  21. Ladonna  December 17, 2014

    I can see where people miss the opportunities here. Lots of good ideas, thanks.

    reply
    • Marianne Lalonde
      Marianne Lalonde  December 18, 2014

      You’re right Ladonna. Not taking the time to shop around can cost you a lot of money in the long run!

      reply
  22. Yatz  December 15, 2014

    This is why it’s important to read the fine print. Thanks for posting.

    reply
    • Marianne Lalonde
      Marianne Lalonde  December 15, 2014

      Thanks Yatz. You’re right about reading the fine print. A lot of people think because it’s an offer to ‘renew’ it’s for the same rate and terms..

      reply
  23. Iryna  December 15, 2014

    Thanks for posting this. Why am I surprised that they would try to rewnew at a higher rate!

    reply
    • Marianne Lalonde
      Marianne Lalonde  December 15, 2014

      You’re welcome Iryna. It really is surprising how many people just sign the offer to renew and send it in.. a costly mistake!

      reply
  24. Trent  December 15, 2014

    Wow! Glad I read this post.

    reply
  25. Lorrin  December 8, 2014

    The issue is something which too few people are speaking intelligently about.
    I am very happy I found article. Thanks and keep up the good work.

    reply
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    reply

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