Mortgage Renewal in 2018 the Best Option? Maybe Refinancing is the Key!
This is what our Friend & Recommended Mortgage Professional Marc Lalonde has to say:
Did you know that 2018 represents one of the largest mortgage renewal years on record for Canada? It is estimated that 47% of all outstanding mortgages will be up for renewal this year. This number represents close to $700 Billion worth of mortgages that are up for renegotiation.
Are you a home owner who’s mortgage is up for renewal this year?
If yes, do not make the costly mistake of simply signing the renewal letter being offered by your current institution. A 2010 Bank of Canada report stated that “over time lenders have improved their ability to price discriminate, that is, to offer discount rates to different sets of consumers based on their willingness to pay”. The report also stated that “high-Income households are likely less inclined to spend the time shopping for and negotiating a mortgage”. Over 80% of Canadians simply sign their renewal letters without asking for advice or help. The banks know this behavior and do not offer their very best rate. Think of it, would you offer a discount if you knew your clients were not likely to ask?
What’s the difference a lower interest rate can make, you ask?
|Mortgage Amount||Term||Rate||Amortization||Monthly Payment||Interest Cost over 5 years||Remaining Balance @ end of the term|
|$400,000.00||5 years||3.64%||25 years||$2,026.75||$67,604.60||$345,999.60|
|$400,000.00||5 years||3.24%||25 Years||$1,942.58||$60,015.31||$343,460.54|