Mortgage Renewal 101: How to Get the Best Deal on Your Next Term
If your mortgage term is coming to an end, you may be wondering how to secure the best deal on your renewal. Many homeowners simply sign their lender’s renewal offer without exploring other options, potentially missing out on lower rates and better terms. With a bit of preparation and strategy, you can take control of your mortgage renewal and save thousands over the next term.
When To Start Planning Your Mortgage Renewal
The best time to start thinking about your mortgage renewal is 4 to 6 months before your current term ends. Most lenders allow early renewals within this period without penalties, giving you time to compare offers and negotiate the best deal.
Early planning allows you to:
Lock in a competitive rate before potential interest rate hikes
Explore different mortgage products that may better suit your financial goals
Improve your credit score, if necessary, to qualify for better terms
Steps To Secure The Best Mortgage Renewal Deal
1. Review Your Current Mortgage Terms
Before jumping into renewal options, take time to analyze your existing mortgage. Ask yourself:
Is my current interest rate competitive with today’s market?
Do I need more flexibility in payment options?
Am I planning to move or refinance in the near future?
Understanding your needs helps you choose a renewal option that aligns with your financial goals.
2. Compare Rates From Multiple Lenders
While your existing lender will send a renewal offer, it may not be the most competitive rate available. Shopping around can reveal better rates and terms. Consider:
Checking with other major banks, credit unions, and alternative lenders
Consulting a mortgage broker who can negotiate on your behalf
Looking into fixed vs. variable rates to determine what suits your risk tolerance
3. Negotiate With Your Current Lender
Many lenders offer their lowest rates to new clients, meaning your renewal offer may not reflect the best available deal. Use your research as leverage to negotiate a better rate. Tips for successful negotiation:
Present lower offers from competing lenders
Highlight your good payment history and strong credit score
Ask about discounts for bundling financial products (e.g., mortgage + banking services)
4. Consider Your Financial Situation and Future Plans
Your financial needs may have changed since you first took out your mortgage. Consider:
Increasing or decreasing your amortization period based on your cash flow
Switching from a fixed to a variable rate (or vice versa) depending on market trends
Making a lump-sum payment to reduce your principal before renewing
Discussing these options with a mortgage professional ensures you choose a renewal plan that benefits your long-term financial health.
5. Watch Out for Renewal Traps
Many homeowners fall into common traps during mortgage renewal, such as:
Auto-renewing without negotiation – This often leads to higher rates.
Ignoring prepayment privileges – Some lenders offer lump-sum payment options to help pay off your mortgage faster.
Overlooking fees – Ensure there are no hidden fees associated with switching lenders or adjusting terms.
Take Control of Your Mortgage Renewal
Mortgage renewal is a crucial opportunity to optimize your financial situation. By starting early, shopping around, negotiating with your lender, and considering your long-term goals, you can secure the best possible deal on your next term.
If you need help navigating the mortgage renewal process, reach out to a mortgage broker to explore your options and ensure you're making the most informed decision for your financial future.
Thinking about renewing your mortgage? Contact FC today, and we’ll connect you with a broker who provides expert advice and tailored mortgage solutions!
