There is a big difference between a renewal mortgage and a refinance mortgage. With a refinance, the amortization schedule and/or loan amount changes, whereas with a renewal you are choosing a new term and interest rate.
If you change the amount of the loan or the amortization rate, it counts as a refinance. Only mortgages where the current term is up and it is being renewed under the same parameters for amortization and amount currently owing, is it a renewal. This might seem like a small difference, and it is, but it is very important if you paid mortgage insurance when you bought the property.
It is very important that if you paid mortgage insurance when you got your original mortgage to not re-finance and if you choose to renew, not to take the first offer the bank gives you. Call us at 604-816-5988 and we can explain this more.
Unfortunately lenders treat their existing clients, who they have made tens of thousands of dollars off already, worse than new clients that walk in off the street. New mortgage applicants get low rates and so should customers renewing their mortgage!
Just Say No to the renewal rate 1st sent to you by your lender!
As your mortgage broker, you will have your own professional mortgage rate researcher. We have access to rates and lenders beyond the big banks’ advertised products. It takes time to switch lenders so don’t leave the process until the last minute. The best course of action is to start as early as possible as you have to re-submit a mortgage application and have it approved by the new lender.
“Almost always reject the 1st rate offered to you by your lender when renewing unless you have worked with their mortgage specialist and already negotiated the rate down. “