What Should You Know Before Renewing Your Mortgage?

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March 15, 2022

Most mortgages will need to be renewed multiple times before they are completely paid off. A mortgage renewal is the process of taking the outstanding balance of your mortgage and renewing it for another term at a new mortgage rate. Mortgage terms can vary drastically in length, though the most common terms range from 1-5 years. If your mortgage will soon be up for renewal, there are several elements to consider before you make a final decision. As leading providers of mortgage lending solutions, the team at PHL Capital Corp knows how intimidating the renewal process can be. That is why we have compiled some information to outline what you should know before renewing your mortgage to ensure that you are choosing the best solution.

Learn how to choose the right mortgage lender for your needs.

3 Things to Consider Before Renewing Your Mortgage

The following elements should be considered before renewing your mortgage to ensure that you are selecting the best option for your needs:

1. Your Current Financial Goals and Future Plans

In most instances, a mortgage provider will initiate the renewal process with an offer that outlines the term, interest rate, and other conditions. Before accepting this offer, it is crucial to see how these new conditions will affect your monthly payments and if this fits your current financial goals. For example, if your employment situation has changed and you are earning more, you may wish to increase your payment amount to pay off more of the principal per month. In addition to your finances, it is worth considering your plans for the future. If you are considering selling your home in 1-2 years, a 5-year term is likely not the best choice for your needs.

2. Your Options from Other Lenders

While it typically makes sense to stay with your current mortgage lender, it is never a bad idea to see if any other options are available. If you find a better offer from another provider, this may give you grounds to negotiate a better rate for your renewed mortgage. This allows you to avoid any penalties or fees associated with breaking your mortgage while paying less interest.

3. Rates, Fees, and Other Costs from Your Current Lender

In addition to looking at other lenders, it is worth examining the conditions and terms associated with your current lender and your mortgage. For example, if you have a variable mortgage with the ability to switch to a fixed mortgage, it may be worth contacting your lender to see if there are any fees involved and if this option is right for your needs.

To learn more about mortgage renewals or to inquire about our lending solutions, get in touch with the team at PHL Capital Corp. We can be reached by phone at 604-579-0847 and will be happy to answer any questions you may have regarding our services.