When your mortgage term comes to an end, you’ll face an important decision: Should you renew with your current lender or switch to a new one? While it may seem like a straightforward process, this choice can have a significant impact on your financial future, so it’s always important to weigh all options with your mortgage agent.
Renewing with your current lender
The easiest option is often to sign your renewal with your existing lender. This approach has its advantages – your lender already knows your payment history and you won’t have to go through a full application process again. Some lenders even offer early renewal options, which can provide peace of mind if you’re worried about interest rate increases.
But, convenience doesn’t always mean the best deal. Many lenders send out renewal offers that aren’t their most competitive rates, counting on borrowers to take the easy path without shopping around. Accepting the first offer could mean paying more than necessary over the next term.
Switching to a new lender
Switching can feel like more work, but it may open the door to better rates, lower fees or mortgage features that align more closely with your goals. A new lender may provide greater flexibility for prepayments, lump-sum payments or changes to your amortization schedule. This flexibility can be especially valuable if you plan to pay down your mortgage faster or anticipate life changes that could affect your finances.
That said, switching isn’t always free. Depending on the timing and details of your mortgage, there may be administrative costs, appraisal fees or legal fees involved. It’s important to weigh these costs against the potential savings to see if the move makes sense.
Making the right choice for you
Ultimately, whether you renew or switch depends on your financial goals, lifestyle and future plans. The key is not to simply accept the first option presented to you but, rather, review all your choices carefully.
Your mortgage agent will help you compare offers, crunch the numbers and find the option that works best for you – not just today, but for years to come.
Wondering if it makes more sense for you to renew with your current lender or switch to a new one when your mortgage term is up? Answers are a call or email away!