A mortgage renewal is an opportunity for you. It is the best time for you to consider a change. It presents an opportunity to i) find a mortgage that better suits your needs, ii) move on from your current lender if you are not satisfied with them, or iii) seek a better rate in the market. You are already an experienced borrower. You know what you are looking for. Now that you have experience, your understanding of the process gives you an advantage.
Here are some key considerations for you as you consider your mortgage renewal.
Has your financial situation changed?
If your financial situation has improved, then you may be able to get a better deal on your mortgage renewal. You may be able to qualify for the lowest rates and be able to increase the size of the mortgage on renewal. If you are a B or subprime borrower who had to take out a higher rate mortgage due to your prior financial circumstances, you now might be able to take a step up and get an A mortgage with better terms and a better rate.
However, if your financial situation has deteriorated, it may be difficult for you to switch or refinance your mortgage with another lender. If your credit score or income has declined, or other circumstances deteriorated you may not pass the underwriting scrutiny of a new lender.
Flexibility
Are you planning to move in the near future? Might your employment circumstances or income prospects change? If there are any reasons why you think you might need to sell or refinance your property within the next five years then consider a shorter-term mortgage. Or consider a variable rate mortgage which will have lower prepayment penalties than a fixed rate mortgage.
