Everyone who has a mortgage at some point in time has had to renew. If you have been fortunate enough to actually have paid it off, congratulations. At renewal time, your lender (whether it’s the bank or a trust company) have fulfilled their term obligation and are looking for your business again for the next five years.

“…about 85% of Canadians auto-renew their mortgage…”

At renewal time, your lender will send you a letter showing what they are offering you, and in about 85% of all cases people will just blindly sign it and send it back. Would you normally agree to a loan for hundreds of thousands of dollars, without looking at your options?

For most Canadians, their mortgage renewal is handled the same way as a magazine subscription is renewed – receive the renewal papers in the mail, sign on the dotted line and send back the paperwork.

Auto-renewing your mortgage is likely one of the biggest mistakes you can make

The banks know exactly what the general public will do, and they expect to only deal with 15% of the public that may question the new rate and ask for a better deal.

I recently ran across one of my customers in exactly that situation, and in fact the rate given to him by the renewal department was almost half a percent higher than what I was offering from the same lender on a new deal.

Consider switching to save at renewal time

Switching your mortgage to a new lender is really a simple task, yes you do have to do a new application and round up employment info, but it’s really not much more than ten pieces of paper.

Switching the amount straight across is usually done by a title company so no lawyers are involved and title insurance in our case is picked up by the brokerage.

The short story is this: it’s your money

You need to make sure you are getting the best deal possible for your mortgage and not just take the word of the bank who offers you just a single line of products.

Mortgage brokers offer large ranges of products and services and have your best interests at heart. As I tell all my clients the banks aren’t really your friends…just try missing a few payments.