How To Get The Best Mortgage Renewal Rate in 2024? 

Did you know almost 80% of homeowners in Canada are up for a renewal in 2024? If your mortgage is up for renewal too, you probably know you’ll be paying more interest on the loan than you did before. While it won’t be fun giving extra money away, it needs to be done. We hope this guide helps you with essential tips to secure a lower mortgage rate with favourable terms. 

Some good news before we begin:

On November 21, the federal government introduced a new Canadian Mortgage Charter, which points out that homeowners with insured mortgages should not face a stress test when they switch lenders at renewal time. Before this change, switching lenders meant undergoing a stress test, which could increase the minimum qualifying rate by 2%. Because of this, homeowners who stuck with current lenders often paid higher rates. 

With the new charter, the market has more competition, which can potentially lower renewal rates for everyone. Now, homeowners might benefit from exploring options with a mortgage broker in Kingston, who can help compare various mortgage offers and find you a sweet deal!  

Here are 5 tips to secure the best mortgage renewal rate in 2024: 

1. Start Your Research Early

Lenders typically send out renewal notices 120 to 160 days before your term ends and by that time you should have completed your research. Keep an eye on the current mortgage rates. Many financial institutions in Canada offer limited time offers with lower rates, so visit these websites often and watch out for deals. With the Canada Mortgage Charter in action, you stand a good chance at getting a lower rate. 

2. Prepay Some Mortgage Right Away 

If your lenders have a prepayment clause, you can unload some mortgage right away. Give them a call and get a clear understanding of their prepayment terms and any penalties associated with it. Some lenders even allow you to make prepayment on the principal amount at the time of renewal. 

3. Go for a longer amortisation period 

If the situation forces you to, you can extend the amortisation period. Instead of 25 years left on your mortgage term, it will again be 30 years. However, be aware that you will pay extra interest in the long run. You can also extend it longer for a single term, pay off some principal at the time of renewal, and then reduce the amortisation period.  

Before signing a new mortgage agreement, carefully review all terms and conditions. Pay special attention to penalties for breaking your mortgage early, portability options, and the ability to make extra payments without penalties.

4. Use a Mortgage Broker

A mortgage broker has access to multiple lenders and can negotiate on your behalf. Their services are usually free to you, as they receive a commission from the lender. Leo Ragusa is a trusted mortgage broker in Kingston and has helped several families finance their homes. Book a consultation with him today. 

Stay informed about economic trends, Bank of Canada rate announcements, and housing market developments. This knowledge will help you at the time of renewal.