Every mortgage has a specific term. It could be the most popular 5 or 3 year term or sometimes 1, 2 or even 10 year term. At the end of the term you will need to renegotiate your rate with the bank for the new term.
In most cases, the bank that holds your mortgage will send you a Renewal Offer in the mail offering to renew for another term with them. They will also send you a list of rates they offer for various terms for you to choose from.
Unfortunately, a lot of people will accept the rate offer that they receive in the mail from their existing bank. The truth is that those rates are most likely not the best rates available on the market. Just a quick example, I just recently received a call from a family that receive a Renewal Offer and the bank offered them 4.59% for a 5 year term. They heard from their friends that the rates were very low these days and wanted to talk to a mortgage broker to see if they could do better. I got them 2.99% for the same term. They could not believe the rate difference!
Please give me a call if your mortgage is coming up for a renewal and I will shop for the best rates for you. Ideally the best time to start looking for the best possible mortgage rate is 4 months prior to the renewal date. It allows me to lock in the best rate for you.
More About Mortgage Renewals
Transferring your mortgage to a new lender on renewal is not a complicated process and there are NO FEES thus saving your family thousands of dollars in the long run!
1. A letter of Employment
2. A most recent pay stub
3. Mortgage Renewal Offer from your current lender
4. A copy of the property tax bill to confirm the amount of property taxes
5. A copy of current fire/home insurance coverage
A minimum time necessary to transfer a mortgage 1 month (we were lucky to make it happen in 2 weeks in some urgent cases!). The sooner you start acting on it, the better. If your mortgage is maturing within a week or so, my advice is to renew with your current lender at an open term, to give us sufficient time to transfer to a new lender. Open term will mean your current lender will not charge you any penalty to release the mortgage.