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Years ago, it was very common for someone to get a mortgage with one bank and stay there for the entire length without ever looking at other options, those days are long gone. If you are up for a Mortgage Renewal, you may want to start thinking about what you will do when the term ends. You can either choose to renew at your current lender however you could potentially be missing out on some great savings or better repayment terms.
Banks often send you a renewal with not their best solutions for you. Understanding the complexity of the different terms, rates, fixed, variable and how penalties are calculated is what we do best. When your current mortgage comes up for renewal, you can choose to stay where you are at then you would choose the term you would like and just sign on the dotted line however should you choose to search out better options, you will have to requalify for your mortgage all over again.
If you got your mortgage prior to 2016 and wish to requalify for a new 5 year fixed term then you qualify at the current contract rate that is offered to you as long as there are no changes to your mortgage amount and amortization. If you choose a term less than 5 years or a variable rate mortgage, you then have to qualify using the new Stress Test. The Stress Test makes you qualify at the current qualifying rate of 5.14%. This is not the rate you get on your mortgage however it is used to ensure that if there is an increase in mortgage rates, that you do not have payment shock.
I have found quite a few of my clients have decided to refinance their current mortgage when it is up for renewal to pay off high interest debt they have been carrying. This is a great idea since it is better to pay under 4% than an 18% credit card however refinance rates are a little different now since they can no longer be insured.
If you have a mortgage coming up for renewal or are possibly thinking whether it is a good time to eliminate a high debt load and reduce your current debt load and lower your payments we always work to help find the best mortgage solution for you.
Whether you are local to Edmonton, Sherwood Park or anywhere in Alberta. Call today at (780) 244-0505 and see what options are available for you.