Economically speaking, Canada is in a different place than it was just a few years ago. Ongoing factors such as inflation, population growth, and unemployment are not just impacting everyday life, but they’ve also made it more expensive to take out a loan. Right now, many homeowners are facing major changes to their mortgage costs after renewal because of this.
If you’re approaching the end of your mortgage term and are concerned about how much your monthly payments may increase, this blog is for you. We’ll go over how renewals work, your options as a homeowner, and helpful strategies for handling rising mortgage costs. Let’s get started.
Worried about rising costs of owning a house? Find out what happens if your mortgage renewal is denied.
Does My Mortgage Renew Automatically?
A lot of homeowners assume that their mortgage will automatically renew when the term is up. This isn’t exactly accurate.
At the time of renewal, you are not obligated to stick with your current mortgage provider. As a homeowner, you have the option to seek out new financing and switch to a different lender once your term has officially expired. So, if your current lender proposes a renewal agreement that greatly increases your interest costs, it’s worthwhile to explore other options. One simple way to do this is by working with a mortgage broker.
If you decide to renew your mortgage with your current lender, the process will be fairly straightforward; however, there will still be crucial details to be mindful of.
Considering a home sale? Find out how to maximize your ROI with these blog posts.
- Is It a Good Time to Sell My House?
- How to Find the Best Oakville Real Estate Agent to Sell Your Home
- How to Sell and Buy a House at the Same Time
When Will I Find Out About My Mortgage Renewal?
Waiting to hear from your lender about a mortgage renewal can be stressful – especially if you’re worried about an increase in your monthly payment amount. So, what can you expect from the process?
If your lender has determined that you’re eligible for a renewal, they will get in contact with you before the end of your current mortgage term; generally, anywhere from a few weeks to several months out. You will then be presented with a renewal statement, allowing you to extend your mortgage with updated conditions (such as your interest rate, payment frequency, and terms) in place.
If you’re happy with the new agreement, you can sign it right then and there.
How Much Will My Mortgage Go Up at Renewal?
Ultimately, you won’t know how much your mortgage payments will increase until your lender presents you with a renewal statement. However, you can estimate what these changes may look like by using a Mortgage Renewal Calculator. For best results, visit your bank’s website to see if they have this type of tool.
What Happens if I Can’t Afford My New Mortgage Payments?
If you’re worried that you won’t be able to afford your house after renewing your mortgage, you’re not alone. In fact, many Canadians are facing this exact situation as a result of rising interest rates. Here’s the good news: there is a solution.
Rather than continue to fall behind on your mortgage, proactively selling your home can help you get a head start on your next chapter and avoid digging yourself even deeper financially. Unlike extending your amortization, selling your house won’t cost you more in interest, and it can help you avoid a similar result the next time your mortgage renews.
Want to know more about the home selling process? You’ll want to read these blogs next!
Reset Your Finances
Although it’s not always ideal, selling your home can also be a strategic financial reset. Once you pay off your existing mortgage and any other outstanding debts, you gain a clear view of your financial standing. This clean slate allows you to create a new, detailed budget for buying or renting your next home.
Need to Make a Move?
If you’re worried about keeping up with mortgage payments or simply want to sell, I’m here to help. As an experienced real estate agent working in Oakville, Ontario, I’ve helped countless homeowners make smart decisions to protect their personal finances, and I can do the same for you.
With more than 3 decades of professional experience, I have the unique insights and expertise to help you maximize your returns, ensuring you have as much money left over as possible after paying off your mortgage. Once we’ve accomplished a great sale, I can help you find a new place that matches your lifestyle and budget.
Ready to sell? I can help! To get in touch, call 905-464-7653 or email me at stacey@staceyrobinson.com.
At Your Service
I’m here to guide your real estate venture with an education to empower you. Let’s chat about what your needs, and I’ll tell you how I can help you meet them.
