What to look out for when renegotiating a mortgage
Whether you’re a home, condo, townhouse or other property owner, timing the refinancing of a mortgage is everything – and key to deciding which bank, mortgage company or other lending institution to sign with and under what terms.
Canadians are feeling the pressure to renew their mortgage, especially with today's historically low rates. Many property owners feel comfortable staying in a business relationship with their current lender, but it's not necessarily the most beneficial from a financial standpoint.
Experts suggest talking to at least one independent mortgage planner, who are capable of shopping your deal to various lenders. There are certainly times where you won't be better off shopping around and your best bet will be negotiating with your current lender, but homeowners who shop around and compare the varous features offered are better positioned to make an informed decision based on their own personal situation.
Most Canadians are now refinancing their mortgages before the low rates start to climb back up, to:
- Get better rates and lending conditions
- Pay off and consolidate debts
- Renovate their homes
- Buy investment properties
- Increase cash flow
It does take some number-crunching to determine whether or not breaking a mortgage early is worthwhile, because refinancing early can bring extra costs, such as penalties, legal costs, appraisal and possibly other bank fees.