5 Things to consider before renewing your mortgage

If a few years have gone by since you purchased your home, chances are, some things have changed. Your family might have gotten larger. Maybe you levelled up in your career. Life is full of changes, and your mortgage should be able to keep up.

Before you commit to a new contract, take some time to assess where you stand. Renewing your mortgage can be a perfect opportunity to improve your financial situation. How? Let’s dive in.

Variable or Fixed?

If you were a first-time buyer at the time of purchase, you probably chose a fixed rate. Many first-time homeowners prefer the stability and comfort of a fixed-rate mortgage.

However, now that you’ve had a few years’ experience, you might want to consider opting for a variable rate. In a low-rate environment, you’ll get a lower rate and pay off your mortgage faster.

On the other hand, if you expect rates to go up in the near future, you might want to secure a fixed rate right away.

Tune into a new frequency

The simple act of changing the frequency of your mortgage payments may help you save a lot of money on interest. Yep, just by paying every two weeks instead of once per month!

Is paying off your mortgage faster one of your goals? If so, choose an accelerated mode of payment. You’ll make 26 payments per year instead of 24. These two additional payments get you one month closer to being mortgage-free. Yes, please!

On the flip side, if your situation has changed and you would feel more comfortable switching from bi-weekly to monthly payments, this might be the perfect time to do so.

Prepayment perfection

Did you know, most mortgages offer you limited prepayment options, often up to 10% of the initial amount of your loan, payable once per year? If you’re in a position to make a large, lump-sum payment on your mortgage, consider doing it at renewal time.

Switch up the amortization period

If you want to shorten or lengthen the amortization period of your mortgage, you can do so when renewing.

Yes, a shorter amortization period means you’ll be paying more every week or month. But you’ve got a good chance of getting a better interest rate, and you’ll definitely be paying off your mortgage much faster.

Refinancing & Renos

If you’re thinking of making renovations to your current home, or you’re considering a move to a bigger place, you may want to refinance your property. Using the equity built into your home is a great way to get the money you need at a fair interest rate, since the loan is guaranteed by the assessed market value of your home.

Still unsure of how to go about renewing your mortgage? We’ve got your back. Log in to EQ Bank and head over to Mortgage Marketplace to learn more!