Renewing your mortgage? Shop around

(NC) Is the term on your mortgage ending? If you still have a balance to pay, it is time to renew. Your bank will remind you by sending a mortgage renewal statement. They are required to do so at least 21 days before your term ends. This statement includes all the important details about your mortgage, including its new interest rate. The rate will probably be higher than it used to be. Here are some tips to minimize the impact of this hike in your costs:

Explore your options

You don’t have to stick with the same lender. Do your research and compare rates with different ones. There may be better deals out there, but keep in mind that there could be charges or you may need to pay off other debts when switching lenders if, for instance, you have a home equity line of credit tied to the mortgage. Also be aware of potential new insurance premiums when switching lenders.

Use your knowledge to your advantage

Use the insights you gained by shopping around to negotiate with your current lender for a potentially lower interest rate. By talking to your lender, you may learn that you qualify for a lower rate. In any case, you will want to take some action because doing nothing leads to an automatic renewal as outlined in the renewal statement.

Take stock of where you are

The time before a mortgage renewal is a good occasion to assess your financial situation and mortgage requirements. Does your budget allow for increased payments? Can you increase the payment frequency? This will allow you to pay your mortgage off sooner.

If you find yourself in a difficult situation, know that you are not alone and that there are some mortgage relief options available to you. Talk to your bank and consider these options before you turn to an alternative lender who may not be federally regulated and may charge higher interest rates.

Learn more about mortgage renewal at canada.ca/housing.