Canadian mortgages are setup differently from their U.S. counterparts. In the USA it's very common to see 25 or 30 year mortgages. In Canada, the most common mortgage term is 5 years. Your mortgage can still be spread out over 25 or 30 years but the term with a particular lender is for a shorter period of time.
Regardless of the term that you have chosen, at the end your term your mortgage is up for renewal. This technically means that your mortgage has matured and the balance is now due and payable. Typically what happens at this point is that you will get a renewal offer from the lender.
In recent years banks have been leaving the renewal offer to the last month or so. Basically, they hold off sending out the letters until the timelines are so short that the client doesn't really have enough time to shop around.
I deal with lenders that will allow us to lock in rates for as long as 6 months prior to closing. This means that if you call me 6 months before your mortgage renews, I can get you approved and protect your rate from rising. The beautiful thing is that if the rate goes lower, I can still get you the lower rate. It's a win-win scenario!
That said, when you are within 30 to 45 days before renewing, it will typically yield the best rates. This is because some lenders offer what they call a "Quick Close" special. This simply means that if your closing date for the new mortgage is within 30 to 45 days of your application date, then they will give an even better rate. The catch is that you cannot lock in these lower rates before this period. Once you apply, it must close within the 30-45 days or you will not get the lower rate. So, it is critical that we discuss this before hand and find out your time lines and flexibilities.
When I first got into the mortgage industry I was completely flabbergasted when I went to a seminar. The manager actually told me that their head office sends out their mortgage renewals at about 0.50% higher than their best rate because they know that 65% of all clients sign it and send it back. Banks, in my opinion, are the most unscrupulous companies around. I would recommend whenever getting a new mortgage, you work with someone that is looking out for your best interests.
I've never understood why clients would renew their mortgage with a bank that would do this!
I have been a mortgage broker for quite a while and I've helped a ton of clients beat their mortgage renewal offers. When you let me handle your mortgage renewal, you can trust the fact that I'll give you the best rates I can up front without hassle.
Call today toll free at 1-866-257-0158 and let me handle your mortgage renewal.