Early Renewal
What is a Mortgage Renewal?
A mortgage renewal is done at the end of your mortgage term when you haven’t fully paid off your mortgage. Your mortgage contract will be renewed with possible term and interest rate changes. When your mortgage is up for renewal, contact us. Our 911 Mortgage Brokers are able to negotiate a better mortgage renewal rate or shop around with other lenders for a better rate.
How Early Can You Renew Your Mortgage?
All of Canada’s major banks, including RBC, TD, Scotiabank, CIBC and BMO, have an early mortgage renewal option that allows you to renew 120 days (four months) before your term ends without any penalties. CIBC allow you to renew 150 days early (five months), while Scotiabank lets you renew 180 days early (six months).
There is no early mortgage renewal penalty if you renew within this period. Switching lenders or renewing before your mortgage lender’s renewal period may cause you to have to pay mortgage prepayment penalties. Note that these prepayment penalties may vary depending on your mortgage rate type.
However, depending on your new personal circumstances, and depending on how close you are to the end of your mortgage term, it may be more cost effective to refinance (and pay a low prepayment fee), and benefit from a higher loan amount if it allows you to reach your goals.
How do Early Mortgage Renewals Work?
Early mortgage renewals allow you to renew your mortgage well before your scheduled renewal date. This allows you to lock in a mortgage rate today, which can be helpful if you think rates will increase before your renewal date.
However, your mortgage contract may specify a different length. You can renew your mortgage without any mortgage prepayment penalties during the early mortgage renewal period. If you renew before this period, you are considered to be breaking your mortgage, which will come with mortgage penalties.
When you renew your mortgage early, you will agree to a new mortgage rate that will apply for your next term. This new mortgage rate can apply in one of two ways, which will vary based on your lender. Some lenders will immediately apply your new mortgage rate to your mortgage. For example, if your renewal date is December but your renewed four months early in August, then your new mortgage rate will be used starting in September.
Other lenders will continue using your old mortgage rate until the new mortgage rate is effective when your mortgage is scheduled to be renewed in December. You can ask to have your mortgage renewal contract to be effective starting the first month after the contract was signed. For example, Canadian Western Bank allows you to sign your mortgage renewal documents six months early, but the renewal itself will only take effect on the mortgage renewal date. Meanwhile, with National Bank, your new mortgage rate will be effective on the first payment after your mortgage renewal contract was signed.
Will an early mortgage renewal save me money?
It depends. An early mortgage renewal will save you money when mortgage rates are lower than your current mortgage rate. However, if the mortgage rates have increased, your current lender may not be offering you the best available rate in the market. At this point, you may be better off shopping for a brand new mortgage.
Also, if your situation has changed and you require some extra funds to consolidate debt, if you wish to do some home renovations, or if you are considering pulling some equity out to purchase an investment property in the near future, you may wish to consider refinancing your mortgage altogether.
How 911 Mortgage Brokers can help
911 Mortgage Brokers routinely help clients who are looking to renew their mortgage. With years of experience in the mortgage industry, we’ll negotiate to obtain the lowest mortgage interest rate and to obtain the most favourable conditions. We will also help you understand the role your home plays in your overall financial picture and provide you with sound financing options to match your current and future goals.
WE WORK FOR YOU, NOT FOR THE BANK.
If a mortgage renewal turns out to be not the best option, we will explore with you with other mortgage options that are more suitable. As you go through life changes, your needs and goals may have changed. A mortgage should always fit your needs, your goals and your lifestyle.
Let our 911 Mortgage Brokers guide you through your mortgage options in your most valuable asset. Whether it is a mortgage refinance, renewal, home equity loan, second mortgage or private mortgage, we have the tools, know-how and more than 50 lenders nationwide ready to help you fund your mortgage or loan option.
Contact us for a free mortgage consultation as early as 120 days before the maturity date of your current mortgage. We will explore your mortgage options, lock in your desired rate and complete your transition to your new mortgage, smoothly and without any hassles.
Call Us Today at 289-318-0911 or Toll Free at 1-888-377-0911 for a free confidential consultation to discuss your options or apply online.
Our Service Areas
911 Mortgage Brokers – The Mortgage Centre offers services to clients across Toronto and the GTA, Vaughan, King, Aurora, Stouffville, Newmarket, Markham, Richmond Hill, Barrie, Innisfil, Orillia, Collingwood, Oshawa, Ajax, Whitby, Mississauga, Brampton, Caledon, Burlington, Oakville, Milton, Bolton, Hamilton, St. Catherines, Niagara Falls, Windsor, Kitchener, Waterloo, London, as well as far as Muskoka cottage country, Ottawa, Simcoe, and the rest of Ontario.
