Homeowners should never accept the first rate offer from their existing lender. Without any negotiation, simply signing up for the market rate on a mortgage renewal is unnecessarily costing the homeowner a lot of money on their mortgage.
Generally it is a good idea to start shopping for a new term between four and six months before your current mortgage term expires.
Each lending institution is different. Many will send out your renewal letter very close to the time that your term expires and this does not give you ample time to arrange for a mortgage term through a different lender. This means that you need to be tracking your own mortgage term timeframe and know when it is time to start shopping for a good mortgage renewal rate.
Your lending institution may contact you 6 months prior to the mortgage renewal date. If you are at a higher rate than the current market trend, they may intice you with an early renewal citing the money you will save. They will offer to waive any penalties usually associated with an early discharge. They will make it sound like an offer to good to refuse. But is it?
Often the lenders offer will be at a higher rate than the rate you may get from a different lender, therefore, you will be actually paying the early discharge fee and more over the term you sign up for.
Be cautious. Before signing on the dotted line, contact an unbiased mortgage professional. They will do the math and ensure you receive a best possible mortgage opportunity available.
