Should you renew your mortgage early?
If you are 4 years or more into a 5 year term, should you consider an early renewal?
A Manulife survey in 2011 found that almost 2 in 3 survey respondents didn’t compare products from lenders when their mortgage was up for renewal.
The number of Canadians who don’t compare mortgage products are surprising considering the dollars that you could save just by asking a few questions.
This is especially the case since the Bank of Canada decided to maintain an overnight rate of 0.75% in early March. This means that your newly negotiated rate will be lower than even the record lows we have experienced in the last 5 years.
Here are some key questions you should ask your mortgage broker in order to make this important money saving decision:
- What penalties will you have to pay to renew your mortgage early?
- If you were to renew your mortgage early – how much money would that save you in the long term?
- If you decide to sell your property before the term ends on your newly negotiated mortgage – what impact will that have on your penalties?
If you aren’t sure whether you should renew early, talk to me! I’m here to help you with your mortgage decisions.