Mortgages 2014 Renewal

Since we are in the first couple of months of the New Year, there are many decisions to be made financially. One of the decisions is for Canadians to sign their mortgage renewal papers. According to a 2011 Manulife survey, about 2 out of 3 Canadians continued with their current mortgage provider without any negotiation.

An article by Global News suggests five things to keep in mind before you sign a mortgage renewal contract.


Posted rate isn’t always the best rate to agree on. A financial planner, Shannon Lee Simmons states, “Banks use the posted rate to provide a value proposition to their clients. They often start with the posted rate and then offer discounts to preferred clients. Consumers need to educate themselves and shop around. Even if you get the secret or discounted rate, if you only get rates from one financial institution, you may still be paying a premium compared to other lenders.” This statement also leads to the next point.

Shop Around

Canadians should shop around and see what other financial institution offers. Doing your own research before going through the negotiations will help you make better decisions and increase the likelihood of receiving a better rate. There are many sources available to do your research before you go into this process. It will help you to become more knowledgeable and prepare for the renewal. This will allow having more room for renegotiation. It is best to start shopping around about four months before a renewal.

Bank or Broker

This is where shopping around will come into play. Explore both option to see which direction you want to go in and who offers the best rate. It is common that brokers would offer the best rate due to having multiple connections of quotes from various institutions.

Loyalty doesn’t make a difference

Being a loyal customer in a financial institution, such as a bank, won’t make a difference in receiving a good deal with your mortgage rate. If you want a better deal, it is best to check all options and compare the rate for what best suit your needs.

Review the Terms

It is important to read the small print before signing any financial commitment. Make sure to agree on everything that was presented to you and nothing more. The Global News article recommends to “make sure the rate you choose offers other options such as the ability to pay extra on your mortgage and clearly defines any penalties should you decide to break your mortgage early.”

Next time you consider renewing your mortgage, use these helpful suggest to make the best financial decision that will suit your situation and need.