Renegotiating your mortgage could save you thousands!
A mortgage rate is the rate of interest charged by your lender or financial institution for your mortgage. A mortgage is defined as a legal agreement by which a bank, building society, etc. lends money at interest in exchange for taking title of the debtor’s property, with the condition that the conveyance of title becomes void upon the payment of the debt.
Reviewing your mortgage rate every 3 years can often save thousands if not 10s of thousands of dollars over the lifetime of your loan.
Implementation and Cost
- Research the market by looking at the rates of other financial institutions (Tip – use a mortgage rate comparison website such as Canstar). If you find your current rate is not competitive, call your bank and ask them to match or beat rates offered by competing institutions. (This should be your first step and it’s easier to stick with your current mortgage/institution if they are willing to offer a better rate).
- If your financial institution is not willing to match the rates of the competition, you need to consider refinancing your mortgage with a different lender. Get in touch with the competing institution that offers the lowest rate and apply to refinance your mortgage (Tip – ensure to look at all fixed and variable costs associated with the loan. Often ongoing fees and variable rates after fixed loan periods end up costing your more over the lifetime of the loan even with the lower upfront interest rates. The comparison rate is often a more accurate reflection of the true cost of the loan rather than the current rate).
- If you are transferring from one financial institution to another, there is often a fee associated with closing your previous mortgage. Your new mortgage is unlikely to have signup fees as the lender is keen for your business. Learn more about choosing a home loan here.