RENEW YOUR MORTGAGE THE RIGHT WAY!
If you are contemplating renewing your mortgage then you should really consider the opportunity that is before you. There are many things that may have changed since you first took out the mortgage. You may be looking to use your home equity to fund a renovation project on your home. Alternatively, you may want to use that equity in other ways, such as purchasing a cottage or holiday home. You may also want to make some long-term investments to secure your future.
There is also the option of putting your other high-interest debts into your mortgage when it is up for renewal. This is one way that Canadians are able to reduce their debt and save on interest payments. In fact, there are many ways to save money when you renew your mortgage.
Saving Money with Your Mortgage Renewal
There are three basic things you need to do to get the best deal on yourmortgage renewal. Be prepared, create a plan, and set an early meeting with a broker.
This means dont be caught off-guard when your mortgage comes up for renewal or you will miss the opportunity to get the best rate and one that suits your needs. You can start talking with lenders a couple of months before your mortgage is up for renewal. Keep in mind that the longer you wait, the less chance you have to save money.
Create a plan
Before you start talking to your broker about renewing your mortgage, decide what you want to do. Consider the best way to use the equity you have earned on your home. You can also take the opportunity to change mortgage lenders. There is no need to stay with your current provider. A mortgage renewal presents a chance to find a lender who better fits what you want in a financial institution.
Meet a broker
Before you decide on whether to sign with your current lender or switch to a new one, meet with a mortgage broker. These are professionals who can offer you advice based on your unique situation. They can also help you find better lending terms if that is what you are looking for.
While it can take a little extra effort on your part, getting a mortgage that works for you is worth the effort. It is important that you are prepared when you renew your mortgage so that you can make the most of the equity you have. This means you need to be ready on your renewal date, have a clear idea of what you want to do with your equity and set a meeting with your broker well in advance.
Call me today if youd like to save money on your next mortgage renewal! 416-568-5111
Mortgage Deferral Agreements and Their Impact
CMHCs Fall 2020 Residential Mortgage Industry Dashboard discusses mortgage deferral agreements and their impact.
At the end of the second quarter, credit unions, mortgage finance companies (MFCs) and mortgage investment entities (MIEs) have allowed mortgage deferral agreements for about 6%, 7% and 7% of their respective residential mortgage portfolios.
Chartered banks have allowed 16% of mortgages to go into deferral since the beginning of the pandemic. Of these, close to 2 out of 3 borrowers had resumed payments on their mortgages at the end of the third quarter of 2020. In the coming months, we could see higher delinquency rates if some borrowers are unable to resume their payments; these mortgages will have to be booked as arrears.
These deferral agreements have affected financial institutions cash flows, with reductions of:
4% in scheduled mortgage payments
3% in non-scheduled payments (accelerated monthly payments and lump-sum payments)
While remaining at low levels, mortgages in arrears (90 or more days delinquent) have increased slightly between the first and second quarters of 2020 from:
0.24% to 0.26%, on average, for chartered banks
0.23% to 0.25%, on average, for non-bank mortgage lenders
We also observe an increase in early-stage delinquencies (31 to 59 days and 60 to 89 days), which suggests that arrears could continue on an upward trend.
Bank of Canada will maintain current level of policy rate until inflation objective is achieved, continues its quantitative easing program
The Bank of Canada today maintained its target for the overnight rate at the effective lower bound of percent, with the Bank Rate at percent and the deposit rate at percent. The Bank is maintaining its extraordinary forward guidance, reinforced and supplemented by its quantitative easing (QE) program, which continues at its current pace of at least $4 billion per week.
The rebound in the global and Canadian economies has unfolded largely as the Bank had anticipated in its October Monetary Policy Report (MPR). More recently, news on the development of effective vaccines is providing reassurance that the pandemic will end and more normal activities will resume, although the pace and breadth of the global rollout of vaccinations remain uncertain. Near term, new waves of infections are expected to set back recoveries in many parts of the world. Accommodative policy and financial conditions are continuing to provide support across most regions. Stronger demand is pushing up prices for most commodities, including oil. A broad-based decline in the US exchange rate has contributed to a further appreciation of the Canadian dollar.