Given the consistent increase of mortgage rates over thepast few years, many people with mortgages renewing in 2023 or 2024 areunderstandably worried about the potential impact on their finances.Unfortunately, many people simply accept the renewal offer from their currentlender without considering other options, which can be a costly mistake in ourcurrent environment. If you're coming to the end of a 3-, 4-, or 5-year term,you will likely be renewing at a significantly higher rate, meaning a highermortgage payment and increased borrowing costs. Although we can't controlinterest rates, there are ways to reduce your cost increase in the short term.Here are some tips to help you navigate the mortgage renewal process in ahigher-rate environment:
1. Plan early and review your file with a mortgageprofessional to discuss any changes in your financial situation or priorities.The sooner you reach out to a Licensed Mortgage Advisor, the more likely wewill be able to find the best possible solution for you.
2. Don't assume that your current lender will offer you thebest rate or terms for your renewal. A different lender may be offering abetter rate, or terms that are more suited to your current needs. Consider allyour options let us help negotiate with your lender to get the most attractiveoffer.
3. Consider a shorter-term or variable-rate mortgage to takeadvantage of lower rates in the future, but be aware of the risks and uncertainties.No one can predict how rates will behave, as we have all learned over the lastyear. We can discuss the advantages and disadvantages of each option to helpyou make an informed decision.
4. Pay down your principal as much as possible to reduce theimpact of higher rates. The less you owe, the less interest you will pay, somake sure you are considering all privileges each lender offers. You may beable to make lump sum payments, increase your payments, or choose anaccelerated payment schedule. Finding a lender that lets you take advantage ofprivileges without triggering any penalty is an important step in insuring youpay less interest overall.
5. Contact a mortgage professional to help you find the bestmortgage solution for your needs and goals, whether you want to stay with yourcurrent lender or switch to a new one. When you work with Lendlab, you will beworking with a licensed Mortgage Broker, from start to finish. We will be ableto shop multiple lenders and provide you with a wide range of options, some ofwhich are only available through the Broker Network. We provide an unbiasedopinion and act as a sounding board throughout the process providing guidanceand advice.
Renewing your mortgage requires careful consideration andplanning, so don't procrastinate or rush the decision-making process. Contact yourLendlab broker today to help you achieve your financial objectives at any pointduring your mortgage term. We are your Vancouver Island mortgage brokersserving you in Nanaimo, Victoria, The Cowichan Valley, Parksville, Qualicum,and beyond!
