Does the thought of mortgage renewal give you headaches? Climbing interest rates and rising inflation are making many uneasy about mortgage renewals.
So, what can you do to secure the best mortgage rates in Nanaimo? Here’s a breakdown of the current market conditions and steps you can take to work through your renewal confidently.
The Current Landscape
The Bank of Canada has raised rates multiple times, which means your renewal rate for the 12 months ahead will most probably be higher than your current rate.
The mortgage stress test, to test if you can afford payments if rates rise further, adds another layer of complexity. While renewing with your current lender usually doesn’t require requalification, seeking additional funds or switching lenders could present challenges.
Don’t Delay Until The Last Moment
Proactivity is key to managing your mortgage renewal effectively.
Step 1: Gather your original mortgage paperwork and any renewal notices you’ve received. This information will provide a clear picture of your current rate, term end, and prepayment options.
Step 2: Use online mortgage calculators to estimate your new payments at different interest rates. This exercise will help you budget and prepare for potential increases in your monthly payments before they occur.
Step 3: Engage with your mortgage broker early. They can clarify your renewal offer and answer any questions, ensuring you’re well-informed and prepared.
Exploring Your Options
When it comes to mortgage renewals, you have several options to consider.
- Tip #1 – Don’t simply accept your current lender’s offer without exploring alternatives. Your broker can obtain quotes from other lenders, potentially securing the best mortgage rates in Nanaimo.
- Tip #2 – If you have a strong payment history and credit score, you might be able to negotiate a lower rate with your current lender. This approach often presents the least hassle and disruption.
- Tip #3 – Breaking your mortgage early might secure a better rate with another lender, but it’s essential to weigh the penalties and advantages carefully.
Remain Hopeful
Despite the challenges, there are strategies to manage your mortgage renewal positively:
- Strategy 1: Evaluate a fixed vs. variable rate mortgage. This is crucial in the current economic climate. Each has its benefits, and a mortgage professional can offer personalised advice.
- Strategy 2: Prepayment options are another valuable tool. If you have savings, using them to make prepayments can reduce the principal amount, thereby lowering your future payments.
- Strategy 3: Revisiting and adjusting your overall budget can help offset potential payment increases. By cutting back on non-essential expenses, you can free up cash to manage higher mortgage payments more comfortably.
Remember, you’re not alone in this process. Engaging with a trusted mortgage broker can provide you with the guidance and support needed to make the best decisions for your financial future.
Contact the Nowik experts for the best mortgage rates and advice in Nanaimo. Call us!