Of Prime Interest: Mortgage renewal can allow for lifestyle changes

Mortgage renewals are one of the most neglected decisions made during the life of a mortgage.

  • Apr. 13, 2013 7:00 p.m.

Every mortgage has a specific guaranteed interest rate for a set term period.

When that term is coming to an end, most banks will send you a mortgage renewal notice.

Mortgage renewals are one of the most neglected decisions made during the life of a mortgage.

Many homeowners stay with their existing mortgage lender because they believe it is too time consuming to shop around for a better rate.

For instance, rates available to a mortgage broker are often as much as 1.7% below the banks posted rate —that calculates into a savings of over $250 per month based on a $250,000 mortgage. Over a five-year term, that’s a $15,000 saving.

As well, a mortgage renewal holder can be pre-approved up to four months prior to the mortgage coming available for renewal.

This is the best of both worlds—a pre-approval will guarantee you the rate for up to 120 days and if the rate goes lower during that period you get the lower rate.  A win-win situation to be sure.

Mortgage renewal time is your opportunity to make changes with your mortgage and not incur a penalty for doing so.

You can  increase or decrease the mortgage amount, choose a new payment frequency, change your amortization or the type of mortgage you have.

The various types of mortgages available are fixed terms (anywhere from six month to 10 year terms), variable rate mortgages or a line of credit.

For example, a fixed rate mortgage could easily be switched to a variable rate mortgage or line of credit. And doing the reverse is also possible.

If you have any high interest loans or existing credit card debt, now might be the time to pay them off by rolling it over into your mortgage.

To increase a mortgage a renewal time, lenders will take into consideration the mortgage holder’s credit history, annual income, employment history and property value to determine those qualifications.

There is always the option at renewal time of depositing extra cash to pay down your mortgage without any penalty.

You can also leave all as is and simply negotiate a better rate.

Mortgage Renewal time is a great opportunity to make the changes that are reflective of your lifestyle today.

Just Posted

Kelowna crew knocks down attic fire in Rutland

No one home at the time as Kelowna Fire Department extinguishes small blaze on Cactus Road

Bolt cutters and bear spray used in Kelowna break-in

“Both suspects were taken into police custody…”

Two-car collision on Springfield Road in Kelowna

Traffic was slowed for about 30 minutes at the corner of Dilworth and Springfield.

Life on Munson Pond looking pretty bright

Earth Day event in Kelowna showcases work that’s four years in the making

Rental housing proposed for Kelowna’s BC Tree Fruit site

Proposal will add 148 new rental units on old packinghouse site

Talent show benefits African orphanage

Summerland Secondary School students organized fundraiser

Blind Bay shooter changes story about accomplice

Jordan Barnes tells the court he was sole person responsible for death of Nicholas Larsen

Prankster broadcasts fake nuclear threat in Winnipeg

The audio recording on Sunday warned of a nuclear attack against Canada and the United States

ICBC reform aims to slow rising car insurance costs

‘Pain and suffering’ payouts to be capped, major injury limit to double

More than 70 guns seized in Spall

RCMP seizure from North Okanagan home follows report of shots fired

Saskatchewan introduces law to allow control of oil, gas exports

The Prairie province has already said it is supporting Alberta in a dispute with B.C. over the Trans Mountain pipeline

Listen Up to The Pack A.D.

CFUZ radio bring garage punk duo to Penticton

Crown seeking jail time for Okanagan hockey fraudster Elphicke

Defence lawyer hinted at a suggestion of a suspended or conditional sentence with no time in jail

Okanagan city’s titles a contradiction: mayor

Vernon was named ninth most dangerous, 18th most romantic and a top honeymoon spot over six months

Most Read