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Renewing Your Mortgage in 2024? Here’s What to Expect

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As 2024 unfolds, Canadian homeowners find themselves at a crucial point in their mortgage – renewal time! In this article, I will explore the current dynamics of the Canadian mortgage market, what to expect when renewing your mortgage, and considerations to ensure a seamless process.

How this year is different.

If there’s a topic that homeowners are discussing in 2024 it’s mortgage renewals! 

It’s true that fixed and variable rates have increased dramatically since the Bank of Canada did one its most aggressive increases in 2022. Do you remember how in early 2022, the overnight lending rate in Canada was 0.25% and since then it has soared to a Prime rate of 7.2%. This became a huge conversation for people getting a mortgage. Currently, as of writing this in February 2024, rates are in the high 4’s if you have an “Insured Mortgage” or low 5’s if you have an uninsured mortgage. This depends on how much equity you have and your credit among other factors.

While the mortgage landscape is different than it was when you got your mortgage, that doesn’t mean your renewal has to be a challenge for you or overwhelm you to the max. As a mortgage broker, it’s my job to help you during the renewal process. I can help search for better rates for your mortgage as well as recommend fixed or variable and why. 

Understanding the mortgage renewal process.

Mortgage renewal is not automatic; instead, it offers an opportunity to reassess your financial situation and explore new terms that may better align with your goals. Typically, mortgage terms in Canada range from one to ten years, with most homeowners opting for five-year terms. But, during the past several years a lot of homeowners didn’t choose that option. Instead they decided to go for shorter terms to see where rates would be heading. That lands us here, today, with your mortgage now coming up for renewal. 

Purchaser who had less than 20% down.

There’s some good news if you purchased a home with less than 20% down and are up for renewal. If you paid a mortgage default insurance premium, you may not have to qualify through the stress test again if you’re wanting to switch lenders. 

Interest rate trends.

As a mortgage broker, I keep a close eye on interest rate trends and help explain these different rates when you reach out to me for a mortgage renewal. I know that with economic factors constantly in flux, it’s crucial that I stay informed about potential rate changes to help you understand renewals and this phase of your mortgage. 

woman signing paper for renewing her mortgage in 2024.

If interest rates are lower than the rate on your current mortgage, it may be an excellent time to explore your options and potentially secure a lower rate, reducing your monthly payments and overall interest paid over the life of the loan. This may mean switching lenders for your new mortgage term. 

Understanding your financial health.

Take stock of your financial health and future goals before renewing your mortgage. Has your income changed? What is your debt load? Are you planning a major life event like marriage, having children, or retirement? Assessing your current financial situation can help you determine the mortgage terms that best suit your needs.

When you reach out to me, we can discuss your financial history as well as your plans to help determine which mortgage loan term will work best for your situation. Every person has a unique situation and needs a unique mortgage solution. 

Receiving your renewal letter in the mail.

Before your mortgage is set to renew, you will receive a letter in the mail from your current mortgage lender about your renewal. Many people believe that your renewal is an automated step and you just continue as is. While you can accept the letter and do that, you do not have to. 

When you receive this piece of mail, before doing anything, reach out to me to discuss. What’s even better… Reach out to me before you’re set to receive this mail. If you know your mortgage is renewing this year, we should be talking now. 

If you have your letter, we can go through it together, see the rate options and decide from there what to do. We can look for lower rates or more flexible terms depending on what’s needed and what you qualify for. 

Changing lenders.

If you do choose to switch from your current mortgage to another lender, the new lender will need to approve you for a mortgage through them. This means you will repeat the mortgage approval process again with the same steps as before. 

We’ll discuss your financial history, employment, debt, etc. The new lender may also use different criteria than your original lender and may need different documentations. If we decide to switch lenders, I will make the process as timely and pain free as I possibly can. 

Get started today with Mortgage Okanagan. 

Renewing your mortgage in 2024 requires a thoughtful approach, taking into account your financial goals, current market conditions, and potential interest rate changes. By reaching out to me and exploring different mortgage options, you can make confident decisions that align with your long-term financial well-being. 

If your mortgage is renewing this year, or you’ve already received your mortgage renewal letter, please reach out to me today. The more time we have to go through your situation and plans, the better! 

Give me a call at 250-826-3111, apply on my website or contact me through my online contact form to start the process today.

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