Mortgage Switch and Renewal
By : Radu Arvatescu
The mortgage renewal process is something that catches many Canadians off guard. When it’s close to the renewal date, it’s tempting to simply sign for the renewal and continue with the current conditions of your loan. However, with fluctuating interest rates, this isn’t always the best option.
With the right mortgage renewal tips, you could switch out lenders, or renew with the same lender with better conditions. While many lenders will send you renewal details as early as six months before the term of your loan ends, some banks will leave it until just 21 days before the end of the term. This is the minimum allowed by the Canadian government.
Understand what’s in your renewal statement, learn how to evaluate your needs, and find out how to switch mortgage providers with the best brokers in the industry.
TABLE OF CONTENTS
- What is the Mortgage Renewal Process?
- What Are Your Options When it Comes to a Mortgage Renewal?
- Mortgage Renewal vs Refinance – What’s the Difference?
- Choosing Another Mortgage Lender – What do the Big Banks Offer?
- CIBC Mortgage Renewal
- RBC Mortgage Renewal
- TD Mortgage Renewal Rates
- Renewing a Mortgage Early
- What to Do When Receiving a Mortgage Renewal Denied Notice
- Mortgage Coming Up for Renewal? Keep These Mortgage Renewal Tips in Mind
The five year fixed rate mortgage is the most popular in Canada. The majority of borrowers won’t be able to completely pay off a home within this time, so they end up going through the mortgage renewal process. This is an opportunity to sign for a new term, usually with different conditions. Rates may have changed during the term period, leaving some better options to consider.
The first step in the renewal process is receiving your renewal statement. This contains information related to your current mortgage but adjusted for a new term.
At its most basic, a renewal statement should include:
- The balance and principal remaining on your home at the expected renewal date.
- The new interest rate being offered by the bank or private lender.
- The frequency of payments to be made.
- The term of the renewal, which will usually be identical to the current mortgage.
- A breakdown of any renewal fees that will be applied upon signing.
If the mortgage renewal advice and tips offered by your lender state that the interest rate will increase, they are bound by law to maintain the current rate until the renewal date. You will usually receive your renewal statement by physical mail unless you have specifically asked your bank for electronic communications and paperless statements.
If you haven’t kept up to date with your mortgage, the lender may send a mortgage renewal denied. They must notify you at least 21 days before the end of your current term if this is the case.
Many homeowners simply sign on for a new term, especially when they are working with a lender or bank that they trust and that offers competitive rates. However, even if you believe you’re getting the best deal today, there could actually be better conditions available. Shopping around is one of the best pieces of mortgage renewal advice and tips that you can learn.
You don’t have to sign with the same lender. You can reject the renewal offer and learn how to switch mortgage providers. If you are unsatisfied with the renewal terms for any reason, then this is something you should strongly consider.
You’ll need to evaluate your needs and your current financial situation before switching banks mortgage. Mortgage renewal rates in Ontario can vary from bank to bank and between private lenders, so it’s always worth exploring your options with a trusted mortgage broker.
Our brokerage firm will work with you to find the lowest mortgage renewal rates in Ontario. We can help you with any of your key questions, including the difference of mortgage renewal vs refinance, and how to switch mortgage providers. We aren’t lenders, so our obligation is to you. We will focus entirely on your needs to find the best conditions with a loan term that you want, and an interest rate that you’re happy with.
Before you sign a renewal offer, keep the following mortgage renewal tips in mind:
- Can you afford to pay off your mortgage faster by increasing your repayments? A renewal with higher repayments will mean you pay less interest over the lifetime of the mortgage.
- You can change to bi-weekly payments if you’re currently paying monthly. This could allow you to better manage your finances and avoid missed payments.
- Has your lender delivered good customer service? If you aren’t happy with your lender for any reason, then you can consider switching banks mortgage.
Your current lender is required to provide renewal details, but they don’t have to offer any advanced mortgage renewal advice and tips. Ultimately, they are looking out for their own commercial interests and financial bottom line. If you want impartial advice and the best possible mortgage for your needs, you need to know how to switch mortgage providers.
Working with a mortgage broker will ensure that you get the best mortgage renewal rates in Ontario. You will get tailored advice based on your unique needs and financial situation. Most importantly, a broker will find renewal options from different banks and private lenders so that you have freedom of choice.
Exploring the market alone would take countless hours of research, emails, and time on the phone. A broker takes care of the legwork to make mortgage renewal in Ontario simple. Take note when it’s time for your mortgage coming up for renewal. Contact us today for your free consultation.
If this is your first time to go through the mortgage renewal process, you will have some important questions in mind. One of the most pressing will be mortgage renewal vs refinance, what’s the difference? Although they seem similar on the surface, these two processes serve slightly different functions.
- The mortgage renewal process is an essential financial step that allows you to transition from one loan term into another. You will likely still owe money on your home after the initial term, and renewal sets you up to continue paying off your home with the same lender. If you remain with your lender then you won’t need to worry about mortgage renewal vs refinance. However, if you plan to change, there’s more to learn…
- Refinancing sometimes occurs during a loan term. It’s a way to back out of your current loan to find one that offers better conditions and lower rates. You could think of it as a form of early mortgage renewal. If you stick with the same bank or lender, you can often avoid hefty penalties. However, if you refinance and move away from your current lender, there may be additional fees to consider.
Renewal is essential at the end of the term, while refinancing is usually a voluntary process. Now that you understand mortgage renewal vs refinance, you’ll be better prepared to navigate through the mortgage renewal process.
The large Canadian banks offer relatively affordable mortgage solutions, but they’re not the best on the market. Whether considering RBC mortgage renewal, TD mortgage renewal, or CIBC mortgage renewal, you will often fond more competitive rates with an FSCO mortgage agent renewal.
Banks simply have less flexibility and they are less likely to tailor their solutions to meet your needs.
The FSCO, or Financial Services Commission of Ontario, is a licensing body now operated by the Financial Services Regulatory Authority of Ontario. An FSCO mortgage agent renewal is a renewal facilitated by a registered broker. Look for FSCO licensing when working with a mortgage agent.
Before we consider what brokers can offer, let’s take a look at how the big banks handle mortgage renewal in Ontario.
The Canadian Imperial Bank of Commerce (CIBC) is one of Canada’s major banks, originally founded in Toronto. CIBC mortgage renewal is a relatively simple process that can be completed in branch or through electronic banking. Below we will discuss the bank and learn about CIBC mortgage rates renewal.
CIBC is impressive in the world of big banks because it offers some incentives when customers switch their mortgages from another provider. If you are with another major bank or even a private lender, the CIBC mortgage renewal switch could come with a cash benefit of up to $3,000. This depends on lending criteria and is at the discretion of the loan officer, so always check first if you decide to go this route.
The current CIBC mortgage rates renewal for a 5 year term is 4.94%. The most competitive term currently offered by the bank is a 3.19% for a 1 year CIBC mortgage renewal. These are posted rates, and special offers can sometimes be more competitive, depending on whether you meet the bank’s unpublished lending criteria.
CIBC mortgage rates renewal is competitive, but it’s possible to find lower when you go directly for an FSCO mortgage agent renewal. A broker will also offer valuable mortgage renewal tips to make the process stress-free.
Note that CIBC mortgage rates renewalisn’t consistent for all customers. The bank may not approve a renewal if you have a poor credit history or have missed payments with the bank in the past.
Does CIBC mortgage rates renewal sound competitive compared to your current mortgage? If you want to learn more about the best mortgage renewal rates in Ontario, you can contact our brokerage today.
The Royal Bank of Canada (RBC) is another popular option for personal banking and mortgages. The RBC mortgage renewal process is simple if you already have a mortgage with the bank. RBC is also a popular choice for switching banks mortgage.
Whether you are renewing with RBC, or if you are considering moving to this bank, you’ll need to learn about the current rates and the RBC mortgage switch out fee.
- If you are up for RBC mortgage renewal and close your variable rate mortgage before the end of the term, you will need to pay an RBC mortgage switch out fee equal to three months’ interest.
- If you are up for RBC mortgage renewal and are paying a fixed rate mortgage, you will need to pay either three months interest or the interest rate differential as an RBC mortgage switch out fee. The differential is calculated by your mortgage rate, the time remaining in your term, and how much the bank would be losing if you switch your mortgage. If the differential is higher than three months’ interest, you will pay the differential.
You can note in this scenario that it’s not in a bank’s best interest to lose you as a customer. In the case of RBC mortgage renewal, the bank simply makes it prohibitively expensive to move your mortgage before the end of the term. If you want to avoid the RBC mortgage switch out fee, you’ll need to stay with the bank until the next renewal.
RBC currently offers a competitive 5 year fixed mortgage rate of 2.590% to qualified borrowers. If you want even better rates and more flexible mortgage conditions, contact our brokerage team today to talk about switching banks mortgage.
TD Canada Trust is one of the largest banking and financial services companies in Canada, with more than 10 million customers. TD mortgage renewal is a simple process, although you will be able to find better rates with an FSCO mortgage agent renewal.
If it’s time for mortgage renewal in Ontario, TD Canada will send your renewal statement outlining the new term, interest rate, repayment schedule, and details surrounding balance and principal. The bank’s current 5 Year Fixed Closed rate is advertised at 2.57% for qualifying customers. The bank’s lowest rate advertised today is a 2.20% 5 year variable closed rate. Advertised rates aren’t always identical to realTD mortgage renewal rates, and are subject to change.
Switching from another bank doesn’t guarantee you access to these TD mortgage renewal rates. Depending on your credit history, size of your loan, type of home, and other details, the bank could increase or decrease the rate.
TD mortgage renewal is worth exploring if you are happy to work with a big bank, however, you can get more choice and access to the most competitive rates with FSCO mortgage agent renewal.
Don’t renew without exploring all of your options. No matter how good you think TD mortgage renewal rates are, you can talk to a local mortgage broker to guarantee that you get the best solution for your needs.
Mortgage rates are volatile. This is true whether you are comparing TD mortgage renewal rates, or private lender mortgage renewal rates in Ontario.
While you can get protection from volatility with a fixed rate mortgage, this can only last so long. You’ve looked at the calendar, and “mortgage coming up for renewal” is still months away. Should you go for early mortgage renewal?
Knowing how to switch mortgage providers is as easy as talking to your broker for FSCO mortgage agent renewal. Your broker will explore the market with private lenders and even some larger lenders that you might be familiar with. They will collate offers based on your profile, giving you the best selection of offers for mortgage renewal in Ontario.
Early mortgage renewal will attract some costs, so it’s important to determine whether they’re worth it. Early renewal is essentially a refinancing. You will have to break the contract with your current lender and begin a new one with your preferred provider. Some banks and lenders will impose significant penalties, as we’ve seen with the RBC mortgage switch out fee.
The only time that you will avoid penalties is if you choose early mortgage renewal with your current provider. Your bank or private lender may even offer some form of a financial incentiveif you confirm your renewal early. After all, they retain you as a customer and avoid the work of having you go through the process of switching banks mortgage.
It’s sometimes not worth the risk to break your mortgage agreement early. Instead, talk to ourearly mortgage renewalbrokerage. We will help you to determine whether it’s worth staying under your current mortgage until the end of its term. We can evaluate your finances, along with any money that you would save or lose by switching lenders.
Changing your mortgage provider is a big decision. Don’t make it without all of the information that a mortgage renewal in Ontariobroker can provide.
While lenders often try their hardest to keep existing customers, there are times when a mortgage renewal denied notice will be sent. Your bank or lender may have concerns about your ability to pay a mortgage. If you have missed payments or frequently asked for extensions, you are more likely to see mortgage renewal denied in a letter before the end of your term.
You may also receive a mortgage renewal denied notice from a new lender if you are trying to switch.
If it’s a credit-related issue, you may need to improve your credit before the end of the current term. If this isn’t possible, a brokerage can help. Through a registered Ontario broker, you’ll get access to a vast network of lenders, including lenders that take on risk from borrowers with less than spectacular credit reports.
Being denied doesn’t mean that you won’t find an affordable mortgage upon renewal. Trust in our brokerage to find the very best solutions and most competitive rates that keep you in your home.
You’ll feel more comfortable after learning thesemortgage renewal advice and tips.
- Don’t wait until the last minute to look at your mortgage renewal. New terms from your current lender may be less than ideal, so you’ll need time to work with your broker and find an alternative. If mortgage coming up for renewal time is here, start thinking about your options.
- If you have received a renewal notice from your bank or lender, don’t assume that it’s the best deal you’re going to get.
- Don’t switch early if it will incur high penalties. The draw of better rates and conditions may be offset by early closure penalties.
- Consider changing conditions on a renewed mortgage. Increasing your payment frequency or even your payment amount could help you to pay off your mortgage sooner, increase your equity, and reduce the interest that you pay.
- Always work with a broker when exploring the mortgage market. You’ll get access to lenders who don’t deal directly with the public. The rates and terms are often more competitive than those offered by the big banks and mainstream lenders.
Mortgage coming up for renewal? We have you covered. Our brokerage specializes in finding the best financial solutions for families, individual investors, and anyone who currently has a mortgage with a bank or private lender. We can offer mortgage renewal tips ahead of signing, or work with you to find a more competitive mortgage or refinancing.
Mortgage renewal is an opportunity to find a better deal. Our brokerage will ensure that your next mortgage is the best yet. For more mortgage renewal advice and tips, we welcome you to contact us.
Lowest Residential Mortgage Rates in Canada*
|Term||OUR RATE||Bank Rate|
|3 Year Fixed/ 25 yrs||2.54||2.850%|
|3 Year Variable/ 25 yrs||0.99% Promo||1.86%|
|5 Year Fixed/ 25 yrs||2.64%||2.84%|
|5 Year Variable/ 25 yrs||1.20% Promo||1.65%|
|5 Year Fixed/ 30 yrs||2.74% Promo||3.04%|
|5 Year Variable/30y||1.45||1.85|
Updated: JAN 17, 2022
* Current promotion rates may provide an additional 0.05% discount. Rates may vary between geographic regions and the posted rates on this website may not be available in your area. Please contact our MCI office for more details and current promotions.
LOWEST REGULAR RATES IN CANADA*
* Current promotion rates may provide an additional 0.10% discount. Rates may vary between geographic regions and the posted rates on this website may not be available in your area. Please contact our MCI office for more details and current promotions.