Mortgage renew coming up - whats your approach

Leveraging, renting vs owning, making an investment or buying a home?
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handyy83
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Mortgage renew coming up - whats your approach

Post by handyy83 » 01 Feb 2016 19:54

Just curious on the general line of thinking; for those with a renewal coming up within 6 months,

what are you choosing?!

I"m leaning towards a 5 yr fix closed which seem to be trending around the 2.4ish range right now. Varr just don't seem to be really jumping at me right now....

HardWorker
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Re: Mortgage renew coming up - whats your approach

Post by HardWorker » 01 Feb 2016 20:04

It depends on the size of the mortgage, how tight your budget is, and your risk tolerance.

Just a Guy
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Re: Mortgage renew coming up - whats your approach

Post by Just a Guy » 02 Feb 2016 09:25

Generally, I'd ask for all their rates from 1-10 years and see what pops up. Sometimes they have some pretty good deals in odd years.

Of course, my mortgages are on rentals, where I like stability, so I look for fixed rates.

Of course, there are times when you want an open mortgage, or variable rates...not to mention looking into prepayment and other options. It all depends on what you're using the mortgage for.

dougboswell
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Re: Mortgage renew coming up - whats your approach

Post by dougboswell » 05 Feb 2016 10:56

As mentioned above you should select a mortgage that fits the terms you want. Perhaps you want to be able to put down up to 20% as a prepayment each year. Perhaps that does not matter but you would like to add a couple of extra payments a year so an accelerated mortgage such as accelerated biweekly might be what you want. Do you anticipating moving in the short term ie 5 years, or do you foresee needing to refinance? You will want a mortgage lender that offers favourable terms to calculate the penalty. The big banks tend to use posted rates as a their rate as opposed to monoline lenders that use their current rate. The one item is that even economists cannot agree upon is where and how high rates will be in the next 2-5 years. Variable rates have to rise at some point. How high they go nobody knows. If you want peace of mind at night perhaps the fixed rate would best fit you. You know exactly what your payments will be for the next x number of years. Some lenders offer you an early renewal without penalty. They don't want you to look around and find a lower rate and leave. Others wait until the last legal day they can before sending out the renewal notice. By then you don't have enough time to look around before signing. Be an informed consumer. Talk to several lenders and read as much as you can about your mortgage so that you know exactly what you want and what you are signing for.
Ask me about the do-it-yourself mortgage designed to save you even more money.

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Re: Mortgage renew coming up - whats your approach

Post by Quebec » 11 May 2017 16:48

Got a ''pre-renewal'' letter for BMO. Basically my mortgage expires in 6 months and they're willing to renew it now without fees. Current rates are lower than what I'm paying, so OK, let's look at this.

On ratehub I see that the best (broker) rate on five year fixed mortgage is 2.34%. Upon calling BMO mortgage centre I was offered 2.49% within minutes. No further negotiation seems possible. The dollar difference between the two rates is about $2 per week. I'm not willing to call the broker, visit the notaire, etc. to save two bucks a week, so 2.49% it is. Total call duration 16 minutes, new rate starts in June, no branch visit needed, documents will arrive by mail, nothing to sign, and I was not offered products I did not need.

I'm a satisfied customer, this is how you keep a client! :)
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nisser
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Re: Mortgage renew coming up - whats your approach

Post by nisser » 11 May 2017 20:01

That's a 15 basis point difference; your mortgage must be peanuts :)

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adrian2
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Re: Mortgage renew coming up - whats your approach

Post by adrian2 » 11 May 2017 21:01

nisser wrote:
11 May 2017 20:01
That's a 15 basis point difference; your mortgage must be peanuts :)
Back of the envelope:
Two bucks a week = $100 per year.
Ignoring amortization: $100 / 0.0015 = $67k
(good enough for government work, given the $2 which could really be an approximation)
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Re: Mortgage renew coming up - whats your approach

Post by Quebec » 13 May 2017 18:50

adrian2 wrote:
11 May 2017 21:01
... given the $2 which could really be an approximation...
Well the weekly differential between $2 and $3. I've pre-paid my mortgage aggressively, it's a semi-detached, and house prices in Qc are much more reasonable than in the GTA or Vancouver.

But I wrote my post to encourage others to call BMO if they get a similar letter, not to brag about my low mortgage balance. :)
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cashinstinct
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Re: Mortgage renew coming up - whats your approach

Post by cashinstinct » 19 May 2017 16:34

MCAP is offering me Prime - 0.85% variable rate, new client , so currently 1.85%.

First National was only ready to offer Prime - 0.60% for renewal.

Will try variable, will see how it goes!

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