Renewing a mortgage in Ontario: What you should know
August 10, 2017 | Posted by: Richard Allatt
Renewing a mortgage in Ontario is like starting from scratch – in most cases, your existing mortgage will be closed and a new mortgage with new terms and rates will be set up. When conditions are favorable, a smart renewal can help you pay off your mortgage faster and save you thousands of dollars.
Start shopping early:
Your current lender will send you a renewal letter about 30 days before your renewal date but chances are very good that the offered terms are not their best. Many people accept the renewal simply because it is convenient, but you are under no obligation to renew with that lender.
Know exactly when your mortgage is set to renew and contact your mortgage broker 90-120 days in advance. This will give you access to the best Ontario mortgage rates for the longest possible period of time before you renew.
Banks can negotiate rates and terms, but are often restricted by the products they offer. On the other hand, mortgage brokers deal directly with the mortgage underwriting department from most financial institutions and can find the lowest interest rates in Ontario on your behalf.
Here is a list of the documentation you’ll need before you renew your mortgage:
1. Letter from your employer describing your name, base salary (or hourly rate), normal hours worked per week, position and length of service.
2. If you work on commission or are self-employed, have three years personal tax returns together with the Notice of Assessments from Canada Revenue Agency.
3. Standard mortgage application.
4. Your most recent property tax receipt.
Minimize Interest Payments:
If your income has been stable and your renewal rate is lower than your previous rate, keep the payments the same despite the lower interest rate. You’ll pay off your mortgage faster and save on interest. If you are making more money, you can shorten the length of the mortgage by paying bigger lump sums.
You can also change the frequency of your mortgage payment from monthly to biweekly or even weekly installments, which will save you a significant amount in the long run – check out your options with these mortgage calculators.
Pay down as much as you can afford on the existing mortgage before signing the new deal. This can save you a lot of interest over the life of the mortgage.
Explore Your Options:
A qualified mortgage broker is your best resource when exploring mortgage renewal rates and options. If you have questions about your Ontario mortgage renewal or debt consolidation, we are here to help. Contact us any time with your questions.