Renewal is the cheapest moment in a mortgage to improve your position, and the one most homeowners spend the least time on. These are the five patterns we see repeatedly.
1. Signing the letter because it arrived
A renewal letter is priced on the assumption you will not shop. Lenders reserve their competitive pricing for files they might lose. Simply asking for a review — or having a broker ask on your behalf — frequently moves the number.
2. Starting two weeks before maturity
Most lenders will hold a rate up to 120 days out. Start early and you can accept a better offer if rates fall, or keep your current lender if they do not. Start late and you take what is available on the day.
3. Comparing rate only
Two mortgages at the same rate can differ by thousands. What matters alongside the rate:
- How the lender calculates a prepayment penalty
- Annual lump-sum and payment-increase privileges
- Whether the charge is standard or collateral
- Portability if you may move mid-term
4. Assuming switching is expensive
At maturity there is no prepayment penalty for moving lenders, and appraisal, legal and discharge costs are often covered by the incoming lender on a straight switch. The net cost is frequently zero.
5. Renewing the same structure by default
If your income, family or plans for the home changed over the last term, the structure should change too — amortisation, term length, or a readvanceable component. Renewal is when that is free to adjust.
Put a reminder in your calendar 120 days before maturity. That single habit is worth more than most rate negotiations.
Want this applied to your own numbers?
Call Phil Cragg at 866-349-4915 or request a written comparison.
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