There is a statistic that was provided to us by Mortgage Professionals Canada that say that 85% of Canadians auto renew their mortgages when they come due. Our thought is that it must mean that 85% of Canadians are paying too much for their mortgage.
Banks in Canada start to contact clients usually about 6 months before your mortgage renewal is due to mature, this way they are always trying to maintain a client and usually that offering is higher than what they would even present on their own website that is visible to the public. A lot of people today are in the habit of just saying yes because they believe that the bank is doing what is best for you when in fact they are employees who must do what is best for the bank.
We have found over and over that mortgage renewal offerings from a lender are usually quite easy to beat, the open market for mortgages offers us a wide variety of lenders who are always looking for new business. The process of moving from one lender to another is quite simple in that it really only requires about 4 pieces of paper from you the client, we would require the current mortgage statement and a copy of property taxes paid, a letter from your employer and a current pay stub.
So nowhere near the paper work that was required when you first applied as down payment is not required. If your home was insured by CMHC or Genworth then you simply move that insurance with you. You will also be maintaining the same amortization as you are at now and example would be if you started at 35 years and this is your first renewal then you would simply renew at another lender at 30 years amortization.
Where mortgage renewals become difficult is if the bank has made your mortgage a collateral mortgage. This means that there is actually more than one charge on your land title and it may be as simple as the bank has part of your mortgage in a fixed rate and innocently enough has also added on a secured line of credit but used your home as security. Many Canadians don’t realize that this has even happened until they try to move their mortgages and find out their home is in a collateral mortgage meaning you have no option but to renew your mortgage with your current lender.
Mortgage Renewal with a Brokers for Life associate can be a very simple process, we will know in advance if your mortgage is a collateral mortgage and what the process will be to move it over to another lender. In many cases there are no issues and we can help you find a better rate with a new lender in a matter of days with minimal paper work.