Mortgage  Renewal Toronto

Renewing a mortgage is a process that happens at the end of a homeowner’s mortgage contract. It’s a chance to negotiate interest rates and contract terms, either with the current lender or by seeking out a new lender that can offer better terms and conditions.

At the time your current mortgage comes to its maturity date, your options are open and it is the perfect time to realign your long term mortgage strategy with your financial goals.

Mortgage terms can vary depending on the homeowner and the lender they’ve chosen. Terms can range from months to five years or longer. Homeowners must renew their mortgage at the end of each term unless the balance is paid in full.

Renewing your mortgage is an essential part of owning a home. It’s mandatory (unless you’re able to pay off your mortgage fully) but you can absolutely use it to your advantage. Renewing a mortgage allows you, as the homeowner, to negotiate new and potentially better terms.

The mortgage renewal process in Canada involves negotiating with mortgage lenders to determine their best possible interest rates and terms. This is an opportunity to shop around and see if other lenders are able to provide better interest rates or products compared to your current lender.

A mortgage renewal in Toronto involves renewing or negotiating your mortgage terms and interest rate in order to continue paying off your loan. It operates as an updated contract and is adjusted by lenders to reflect the current real estate market.

Similar to a mortgage renewal, refinancing a mortgage involves changing your current terms or adding to your loan. The difference is that with mortgage refinancing in Toronto, you’re breaking your contract in its entirety and signing a new one.

This is often used as a debt consolidation or home equity solution. One of the most common changes we see as part of a refinance is to add a Home Equity Line of Credit to your loan!

As mentioned, the end of your mortgage term is an opportunity to evaluate your current standing and determine if there is a more affordable way to meet your financial goals
.
While you can certainly renew with your current lender, a mortgage broker can help you branch out and learn what other lenders can offer. A broker has access to numerous lender connections, and can tip you off to the best rates and terms currently. Moreover, they have an intimate knowledge of the current mortgage landscape.

They act as your point-of-access and determined advocate as you seek to capitalize on the transition. When a broker does their job right (as we do here at Stonefield Mortgage), they ensure you’re never paying more than necessary as a homeowner. A broker who specializes in mortgage renewal evaluation can help find options for you that you might not normally think of. For example:

• Adjusting amortization to reduce payment amounts
• Helping you access the equity in one or more of your properties
• Recommending financing solutions that reduce taxes (like shifting debt to income-producing properties for example)
• Putting you in a position to meet your real estate and financial goals

At Stonefield Mortgage, we believe homeowners deserve quality mortgage solutions. That’s why we’re proud to offer a selection of professional broker services, including helping our clients navigate better mortgage renewal terms and rates.

As industry leaders, we have access to over 40 of the top lenders in Canada. Our unparalleled expertise and networks allow us to secure the best possible rates for our clients and ensure they’re able to meet their short-term and long-term financial goals.

A mortgage renewal offer will happen towards the end of the homeowner’s current term and provides you with the option to stay with the current lender. Most big lenders will send you an email notification asking you to start the process a few months before the maturity date, subtly (or not-so-subtly) steering you back toward their products.

Our expert advice: don’t brush off this opportunity. Too often, homeowners simply sign with the same lender or allow an automatic mortgage renewal as the deadline passes. But if you start early and make some shrewd moves through the renewal process, you can potentially save a lot of money. We strongly recommend having a mortgage professional help you evaluate your mortgage renewal options.

Get a head start by contacting us at least 90-120 days before the term ends, otherwise known as your maturity date.

During a mortgage renewal process in Toronto or anywhere in Canada, it’s important for homeowners to disclose specific information in their applications, including:

• The remaining principal or balance at the date of the mortgage renewal (maturity)
• The interest rate
• The term
• The payment frequency
• Any fees or charges that may apply (renewal fee, etc.)

A larger part of the renewal discussion will include your income, debt information, credit scores and your financial goals. The best step to get a quick and ACCURATE answer is to fill out our mortgage application.

• Are you happy with your current lender and their customer service?
• Do you have the ability to make additional payments?
• Would you like your monthly payments to be lower?
• Do you have any debts with higher interest rates that you need to consolidate?
• Would you like to change the frequency at which you are paying your mortgage?
• Have your life goals or financial situation changed since you took this mortgage?
• Do you currently have a home equity line of credit attached to your mortgage?

Please note: If you do not respond to your mortgage renewal, there is likely a clause in which it will automatically renew. Make sure you consider your options well in advance.

Yes, absolutely! Most lenders will not offer their best and final offer as the first offer. Without a competing offer to leverage, your lender may not budge too much on their rate. Often, the top 10 mortgage lenders in Canada have a wide range of rates and your lender might not be able to get to the competitive pricing of the best lender in the market.

We recommend having a mortgage expert determine the best rate and product available for you and do the negotiating on your behalf. Since we have access to all the different offers and products available, we know when there is room for negotiation!

You can renew your mortgage at the end of your current term, and it is best to look into this around 90-120 days before your renewal date. Your current lender will send you a renewal letter outlining the terms for renewal with them. Take this letter to a broker and ask them to shop around for a better rate.

Collaborating with an award-winning broker, you can also use this transitionary period to re-evaluate your financial situation and goals to determine if there is a mortgage product that better suits you right now.

Most lenders will use an early renewal to entice you into taking a rate that is more attractive than other options at face value but you need to be careful that what might seem like a good deal, could be the bank locking profit for themselves.

If you have a mortgage coming up for renewal in 6 months and your current rate is 3.00%, and the market rate for a 3 year term is 4.00%, the bank could offer you an early renewal at 3.90% for a 3 year term. At face value this saves you 0.10% per year or a total of 0.30% over 3 years. Don’t forget that by renewing early, your rate is jumping from 3.00% to 3.90% NOW, instead of 6 months from now. The overall cost of this is approx 0.45% (3.90% minus 3.00% divided by 2 because this is for 6 months only). This early renewal mortgage solution actually cost you 0.15% more!

Unfortunately this type of marketing messaging and product offering is confusing even to most mortgage brokers who specialize in renewals.

It is uncommon for a loan to be fully re-underwritten at renewal but in theory this can happen. You can minimize your chances of being denied by making all your payments on time and keeping up with your property taxes, maintenance fees and home insurance bills.

Certain lenders may decide to reevaluate your loan even if you behave perfectly. Depending on your home’s value, income, debt servicing capabilities and the risk the lenders associated with your mortgage, your mortgage renewal may be denied.

Don’t panic if this happens to you, if your existing lender does not wish to renew your mortgage at maturity there are often many other options available. Mortgage lending is on a spectrum and you may have to move along that spectrum for your mortgage to be renewed.

In some cases, it pays (literally) to change lenders if you’re able to find one that can offer lower interest rates and better terms. And in other cases, it makes sense to stick with the same lender.

If you aren’t immersed in the complex world of mortgages and financing, it can be tough to know the best course of action. Luckily, a Stonefield Mortgage broker will act on your behalf and negotiate with new lenders to determine if they can match or improve upon your current terms.

In many cases, new lenders (and even brokers) will cover the cost of changing from your existing lender to earn your business! If you decide to renew your mortgage with a new lender, note the potential additional costs involved, including:

• Switching Provider Fees
• Set-Up Fees
• Appraisal Fee
• Administration Fees

At Stonefield Mortgage, we help our clients navigate the mortgage renewal process from start to finish — ensuring they understand the fees and conditions involved as they switch mortgage lenders.

Stonefield Mortgage is proud to offer quality mortgage solutions in Toronto and across the GTA. We help our clients determine if renewing their mortgage with the same lender is right for them.

Our mortgage renewal services are available in:

• Vaughan
• Mississauga
• Brampton
• Etobicoke
• Pickering
• Ajax
• Aurora Oakville
• Markham
• Richmond Hill
• Scarborough
• Newmarket
• Whitby
• Toronto

Contact us today to set up a free 15-minute consultation.