With a fresh start to 2024, the landscape of mortgage renewals is evolving amidst changing market conditions and financial landscapes.

As shown in the graph, we have over $900 billion of Mortgages renewing in Canada over the next 3 years.

This has us wondering if banks will focus on retaining their clients with aggressive rate offerings, or will they focus on obtaining new mortgage business? It’s hard to see which direction the lenders will take when it comes to offering rates.

For borrowers preparing to renew their mortgages, understanding the current trends, options, and potential challenges is crucial. Here are the important steps to help you navigate through the process:

1.) Contact your current lender to inquire on what renewal options are available through them. These options should include things like:

Amortization: Determine if you want to keep this the same, increase or decrease. Amortization will affect your payments but also impact the interest-rate.

Mortgage Amount: Decide if you want to extract equity from your house for things like renovation, investing or debt consolidation. This could also impact the rate. Or maybe you want to make a lump sum payment and reduce the total borrowing amount.
Term Length: This decision should include market trends for the short and long term but also your own financial goals and personal objectives with the house.
Rate: While this is always important, the rate is not the most important. The terms and payout penalties are equally important if not more.

2.) Once you have a handle on what your bank will offer, contact a broker for a second opinion. While this extra step may cost you in time, it could save you in rate/payments/amortization.

3.) At our brokerage, we will always provide you with the most competitive options and we will negotiate on your behalf wherever possible. It is the path of least resistance to stay and renew with your current lender. Afterall, there is no application or credit check needed.

4.) If your existing lender will not provide comparable or competitive options, we will discuss the next steps and we will determine if it makes sense to purse a new mortgage with another bank. This will include the collection of a new application and basic financial documents. Depending on the new bank, there may or may not be fees or transfer costs involved. In many cases, there are no fees to transfer your mortgage and no lawyer required. That said, if you plan on restructuring your mortgage, be prepared for a home appraisal which is a minor cost and a quick turnaround time.

5.) If agreed, our brokerage will submit your application to the bank that will best suit your financial needs. Within short order, we will have a new approval presented for you and we can complete the entire process with electronic and remote signing. Not to worry though. If your application is not approved, it does not jeopardize a renewal offer presented to you by your current lender. In Q4 of 2023, the government did make positive changes for many homeowners looking to renew where they have loosened the red tape on qualifying.

In conclusion, navigating mortgage renewals in 2024 and onward, requires proactive planning, understanding options, and staying informed about market trends. By taking these steps, borrowers can secure favorable terms and effectively manage their mortgage obligations in the current economic climate.

Mortgage Renewals - What You Need to Know!