Mortgage renewals can be both an opportunity and a challenge, especially in today's market with higher interest rates. If you're facing a mortgage renewal, you're in the right place. In this blog, we will guide you through effective strategies to navigate the renewal process, ensuring you make the most of it while managing increased interest rates.

Start Early and Shop Around:

Mortgage renewals present an excellent opportunity to reassess your financial situation and goals. In a higher interest rate market, beginning the process early, typically around six to nine months before your current mortgage term expires, is crucial. Starting early allows you to evaluate your options, compare rates, and choose the best deal. When reaching out to your mortgage team early, you increase your chances of securing a more competitive interest rate and maximum flexibility in your new mortgage. This allows your mortgage team to evaluate your goals and provide you with the options upfront that help you and your family succeed. Your independent mortgage team should have access to all the big banks, credit unions, and alternative lenders, giving you the most exposure to options.

Choosing Between Fixed and Variable Mortgages:

When choosing between a fixed or variable mortgage product, it's important to weigh the pros and cons of each option and consider your long-term goals. A fixed-rate mortgage provides stability and predictability for your budget but may result in slightly higher initial rates. A shorter-term fixed-rate mortgage may provide lower initial rates but exposes you to the risk of frequent renewals in a volatile market. A variable-rate mortgage can offer lower initial rates and potential savings but also exposes you to the risk of higher payments if interest rates rise. Speaking with a mortgage professional can help you choose the best option for your family's needs and goals.

Pay Down Your Mortgage Principal:

Paying down your mortgage principal is still an effective strategy to save money on interest and potentially secure a lower interest rate at renewal. However, it's important to check with your lender to see if there are any penalties or restrictions before making extra payments. Additionally, it's important to consider your overall financial situation and goals before making extra mortgage payments, as it may be more beneficial to focus on paying off high-interest debt or building up savings first. Overall, paying down your mortgage principal can be a smart financial move, but it's important to weigh the potential benefits against any penalties or restrictions and consider your overall financial goals and situation.

Seek Professional Advice:

Navigating the mortgage renewal process can be complex, and professional guidance is invaluable in a higher interest rate market. Engaging with your mortgage advisor or financial advisor experienced in the Canadian market can help you make well-informed decisions. They can assess your unique financial situation, risk tolerance, and long-term goals to provide personalized advice. They are also well-versed in the ever-changing mortgage landscape, ensuring you are aware of the latest offers and strategies to optimize your renewal.

At Boychuk Mortgage Group, we take pride in providing you, our client, the education you need to make that big decision for you and your family. It's important to understand where we are in today's economic outlook as well as to understand what lenders are available to you, what mortgage products those lenders are offering, the flexibility within those mortgage options, as well as lender rates and, in many cases, cash back opportunities. Ultimately, we do the shopping for you to help save you time, effort, and money.

Consider Refinancing:

In certain circumstances, mortgage refinancing can be a smart choice at the time of renewal. Refinancing allows you to renegotiate the terms of your mortgage, potentially obtaining a more favourable interest rate, extending or shortening your amortization period, or accessing home equity to pay off high-interest debt and even save for a rainy day. Refinancing may enable you to lock in a lower rate or access home equity to pay off high-interest debt and even save for a rainy day. However, it's essential to consider any penalties or fees associated with breaking your existing mortgage terms when assessing the viability of refinancing. This is where your mortgage professional can help break down the pros and cons of your mortgage refinance, outlining where possible savings can be made.

Don't let mortgage renewals intimidate you. With the right strategies, you can take advantage of the process. If you need professional guidance in navigating mortgage renewals in today's market, get in touch with Riley Boychuk today!

To learn more about the services we offer, please click here. If you have questions, we'd love to hear from you. Please feel free to call us at (778) 808-9944 or email riley@boychukmortgages.ca.

• Bridge financing is a short-term, temporary loan that is designed to help homeowners like you, “bridge” the gap between the sale of your existing property and the purchase of your new home. This allows you to access your equity for your down payment on your new purchase, while you wait for the sale of your existing home to complete.

• Bridge financing allows you to make quick moves in hot markets, purchasing your new home before yours sells.
• Bridge financing provides you a peace of mind, knowing that you have more time to sell your home for the price you want.
• Bridge financing allows you to use the equity in your home for the down payment on your next home.
• Bridge financing gives you the opportunity and funds to make upgrades to your new home before officially moving in.

• Once your mortgage has been approved on your new purchase and you have a firm sale agreement in place on the sale of your existing property, you will be eligible for bridge financing.
• The reason your lender will require a firm sale agreement in place is so they can confirm you have enough equity to cover the bridge loan, and otherwise, the total remaining down payment.

Typically, there are three main costs associated with bridge financing

• Interest

• A typical interest rate on bridge loans today will fall in the range of prime + 2.5% to prime + 5.0%.
• For example, on a bridge loan of $250,000 at a prime rate of 2.70% and a premium of 4.0%, your bridge loan cost you $45.89 a day.

• Lender fee

• This is not a fee that we charge, but rather a fee the lender collects. This cost can range from $300 - $600.

• Legal fee

• When legally binding your bridge loan at your legal team’s office, a fee of around $300 is typically charged for contractually arranging and registering your bridge loan on the title. This step is similar to securing your mortgage and ensures the lenders security, knowing that they will soon be repaid.

• Your bridge loan will typically last for 30 to 60 days with the possibility, or exception to extend it past 60 days, based on the circumstances and strength of your file.

• The repayment of your bridge loan is handled on the back end by our mortgage team, your legal team, and the lender.
• Following the final sale of your prior home, the net proceeds will be set to transfer over, and your mortgage will kick in.

• We recommend that you contact one of our team members to walk you through each step of the loan process. While not every lender offers the option of bridge financing, our team will be able to educate you on what you need to know and the steps to take to secure your bridge loan.