Mortgage Renewal & Switching in Ontario
Your mortgage renewal is an opportunity to review your options, not simply sign the renewal offer from your current lender.
Whether your mortgage term is coming to an end, your payment is changing, or you are considering a different lender, it is worth understanding your options before making a decision.
I’m Wilson D’Souza, Mortgage Agent Level 2 with Mortgage Architects. I help homeowners compare mortgage options based on their financial situation, goals and current lending guidelines.
What is a mortgage renewal?
A mortgage renewal is the process of renewing your mortgage for a new term when your existing mortgage term ends.
Your current lender may offer you a renewal, but you do not necessarily have to accept that offer. You can explore other mortgage options and compare what is available before choosing your next term.
Should I renew with my current lender or switch?
There is no single answer that is right for everyone.
Your current lender may offer convenient renewal terms, but another lender may have different rates, features or qualification requirements. Your financial circumstances may also have changed since you originally obtained your mortgage.
Before accepting a renewal, consider:
• The interest rate and mortgage term
• Your payment and amortization
• Prepayment privileges
• Penalties and other mortgage features
• Whether switching or refinancing could better suit your goals
• Whether your income, credit or debt situation has changed
The right decision depends on your circumstances, not simply the advertised rate.
When should I start planning my mortgage renewal?
It is a good idea to start reviewing your options several months before your mortgage term ends. This gives you time to understand your current lender’s offer, compare alternatives and address any qualification or documentation issues before the renewal deadline.
What happens if my financial situation has changed?
Your financial circumstances may be different from when you first obtained your mortgage.
You may have changed jobs, become self employed, taken on additional debt, experienced a change in income, or built significant equity in your home.
If you are considering switching lenders or refinancing, the new lender will assess your application based on its current lending guidelines.
This is why it can be helpful to review your situation before your mortgage term ends.
Can I switch my mortgage to another lender?
In many cases, homeowners can switch their mortgage to another lender when the term ends.
However, switching is not simply about finding a lower rate. The new lender must still approve the mortgage, and qualification requirements can vary.
Before switching, consider:
• Interest rate
• Term
• Amortization
• Prepayment privileges
• Penalties
• Fees and closing costs
• Qualification requirements
• Features that matter to your situation
What is the difference between renewing, switching and refinancing?
Renewal means continuing your mortgage with your existing lender for a new term.
Switching means moving your existing mortgage to another lender, generally without increasing the mortgage amount or changing its purpose.
Refinancing generally means changing the mortgage in a way that may involve increasing the amount, accessing home equity, consolidating debt or changing the structure of the mortgage.
These options can have different qualification requirements and costs.
Can I consolidate debt when my mortgage comes up for renewal?
Possibly.
If you have credit card balances, lines of credit or other debts, refinancing may allow you to use available home equity to consolidate some of those debts.
However, debt consolidation should be evaluated carefully. A lower monthly payment does not necessarily mean a lower total cost because the debt may be repaid over a longer period.
A mortgage professional can help you compare the numbers before you make a decision.
What should I do before accepting a mortgage renewal?
Before accepting a renewal offer, take some time to review your options.
Consider:
• Your current mortgage balance
• Your remaining amortization
• Your renewal rate and available alternatives
• Your monthly payment
• Your financial goals
• Any debt you may want to consolidate
• Your plans to sell, move or refinance
• The mortgage features and prepayment options
A mortgage renewal is an opportunity to review your overall mortgage strategy.
How can I compare my mortgage renewal options?
Every homeowner’s situation is different.
I can help you review your current mortgage, understand the available options and determine whether renewing, switching or refinancing should be considered.
There is no obligation to proceed with a new mortgage.
Let’s review your options
If your mortgage is coming up for renewal, don’t wait until the last minute.
Let’s have a conversation about your situation and your options.
Book a Strategy Call with Wilson D’Souza, Mortgage Agent Level 2 with Mortgage Architects.
