MORTGAGE RENEWAL

My mortgage is up for renewal at the end of June. I’ve approached mortgage renewals with a lot of anticipation. I view it as a great opportunity to get a better deal and save a lot of money over the long run. I recognize though that in the ten years or so that I’ve had a mortgage, it’s been relatively cheap to borrow money. Interest rates have been low compared to pretty much any time frame before this last decade.

I always receive the mortgage renewal offer from my lender with a bit of skepticism. My thinking is that there is always a better deal out there to be had and I should do my research before signing the offer. So, when the renewal offer arrived in my mailbox a few weeks ago, looked at it, and then had a few mortgage brokers offer their opinion on what my lender had sent me. Now keep in my mind, I hadn’t looked at mortgages in great detail for five years when my last renewal was up. I was aware of the interest rate that I was paying but I didn’t know what mortgages were like now and I especially didn’t know what mortgages were like during this pandemic.

So, I had no idea what my renewal offer was like in the context of the current mortgage market. As I began to contact mortgage brokers, each one pretty much said the same thing. The renewal choices that my lender had sent me were exceptionally good for me and that they would be impossible to meet, let alone beat, with any current mortgage offer that they could get their hands on. I was told that the pandemic had made most lenders a bit apprehensive about mortgages in the current world situation and that rates weren’t as competitive as they might have been just a few months ago (when the prime lending rate was even higher).

All of this was quite the education for me and I felt very lucky that my lender had sent me some awesome options for renewal. I wonder now that if my renewal had been set for later in the summer, would these offers be the same?

In the end, I went with a 5-year, variable rate mortgage, with the rate set at prime lending rate minus 0.90%. At the time of this writing, assuming the prime lending rate doesn’t change, starting in July, my interest rate will be 1.55%. I’ll have to check the records but I believe that is the lowest interest rate I’ve ever had for a mortgage. I had to do the math on this, so it might be wrong, but that translates to bi-weekly payments of around $260.

I feel extremely lucky during these difficult times that I still have a job and that I was able to renew my mortgage with such favourable terms.