Top 5 Mortgage Renewal Tips: Our Guide to Renewing Your Mortgage in Victoria

Most homeowners in Victoria will face the same challenge at some point: renewing their mortgages.

While it might seem like extra work, mortgage renewals are an opportunity to evaluate your current financial situation and find better interest rates.

Understanding how to find the best deals can save thousands of dollars and improve your financial circumstances in the future.

In this post, we’ll reveal five top tips for mortgage renewals in BC so you can feel confident about the process.

Let’s get straight to it.

What Should You Consider When Renewing Your Mortgage?

Long-Term Impact: It’s easy to focus on convenience and stay with your current mortgage lender, but are you getting the best deal? Doing your research and shopping around could mean you save lots of money in the future.
Financial Stability: Are your finances stable? Is your job likely to change in the future? Knowing this can help you decide whether you need to find lower interest rates.
Base Interest Rates: The Bank of Canada recently decreased its base interest rate to 4.5%, and if the economy keeps improving, we might see these rates decrease further. Opting for a variable-rate mortgage could help you save money, but fixed-rate mortgages are more stable.

Top 5 Tips For Mortgage Renewal

Are you ready to take the stress away from the mortgage renewal process? The following tips will make the search easier and ensure you have confidence in your new provider.

Start Shopping For Mortgage Renewal Quotes Early

One of the most common mistakes homeowners make is waiting until the last minute to start the mortgage renewal process.

Most mortgage companies send a renewal notice within six months of your term expiring, giving you enough time to begin the research process. When you look for quotes early, it gives you an advantage.

You can explore various mortgage lenders and review their rates. Here’s why early research is vital:

Avoid Pressure: Getting close to a renewal date can increase pressure, and you may need to accept an offer quickly. You’ll have plenty of time to review your options by starting early. The
Secure Better Rates: Interest rates can fluctuate, but beginning your search immediately means you can secure better rates and lock the deal in before interest potentially rises again.
More Time to Switch Lenders: You might find that other lenders offer better terms or lower interest rates. You’ll have more time to compare lenders and feel confident in your financial decisions.

Consider Your Current and Future Income

Has your financial situation changed since you last applied for a mortgage? Perhaps your living costs are higher, or you lost your job.

On the positive side, you might earn more money and could afford to make larger monthly contributions.

When assessing your financial situation, remember to consider the following factors:

Affordability: Which mortgage repayments can you afford? Would extending the amortization term offer more financial benefits?
Risk Management: Nobody knows what the future holds, and you’ll need to think about whether your income is likely to change.

By assessing your current and future income, you can tailor your mortgage renewal to meet your needs today and in the future.

Consider Your Immediate and Ongoing Financial Goals

Your long—and short-term financial goals should also factor into your mortgage renewal decision.

For example, short-term goals are easier to consider, but long-term objectives mean you’ll need to consider the type of mortgage that suits your needs.

Some financial goals to consider include:

Reducing Debt: Who doesn’t want to be debt-free? If you can afford it, making higher repayments or choosing a shorter amortization period might help you pay off the mortgage.
Future Investments: If you’re considering making other investments, opting for lower mortgage payments could free up some cash.
Home Renovations: Property renovations are a wise long-term investment, as they increase your home’s value. If you’re renewing your mortgage, it might be worth increasing the amount to fund home improvements.

Get A Rate Hold

Mortgage rates can be unpredictable and often fluctuate. Finding a rate that suits your needs means you’ll want to secure it.

That’s where a rate hold comes in. Depending on your lender, they enable you to lock interest rates for up to 120 days.

Here’s why you should explore interest rate holds:

Protection: If interest rates rise when you’re in the locked period, you’ll still get the lower interest rates.
Flexibility: If rates drop, you can often still secure the new lower rate, creating a win-win situation.

Even if your mortgage isn’t set to renew for a few months, having a rate hold in place means you won’t sacrifice more competitive rates when your mortgage fluctuates.

Give Time to Switch Lenders

Sure, sticking with your current mortgage company is easier, but you could be missing out on some fantastic deals. Another lender might offer more competitive rates that align with your financial objectives.

Remember that you’ll need to compare deals and sign any paperwork, so it’s essential to give yourself enough time.

When you take time to compare lenders, you’ll:

Understand each mortgage company’s rates and terms instead of rushing through the process.
Review multiple offers and negotiate with lenders to secure the best possible deals.
Have enough time to notify your current lender and complete paperwork without worrying about deadlines.

Book A Consultation To Renew Your Mortgage in Victoria

Renewing your mortgage doesn’t have to be a stressful process—especially when you have an expert team of brokers on your side.

Working with professional mortgage brokers gives you access to a vast network of lenders that align with all financial circumstances.

Whether you have a poor credit rating or want to access an extended amortization rate, Prime Mortgage Works can help.

Our brokers will assess your financial situation, compare the best lenders for your needs and support you throughout the mortgage renewal application process.

Please feel free to begin your mortgage application today or contact us if you have any questions.