Should I Renew My Mortgage Or Switch Banks?

When pondering the question: should I renew my mortgage or switch banks, below are 3 reasons why you should NEVER take the bank’s first renewal offer on your mortgage.

I received an email this week in my inbox by a woman named Carol. She was not my client but she had some questions for me. Carol’s mortgage was renewing in July and her bank that she had been loyal to since childhood offered her a mortgage rate of 5.35%. For anyone that is not up to speed on current rates, that rate is HORRENDOUS for an A client. At Robert Floris’ Mortgage Architects Office, we were happy to help her but it did get me thinking as to why you should never accept the bank’s first mortgage renewal offer. After working in the banking system for many years, now I enjoy much more helping the consume

1. The Bank Wants To See What You Know

Let us take Carol‘s example. Luckily, she questioned should I renew my mortgage or switch banks and came to us. Most clients do not bother to shop and sign the renewal automatically thinking they’re getting the going rates. If only 50% of the bank’s clients questioned that, then the bank is making a tidy profit at the expense of a consumer. When Carol contacted us, we told her our rates but we also told her to go back to CIBC and tell them our rates from Mortgage Architects. Suddenly CIBC matched our mortgage rates. Who do you think Carol trusts more?

2. A Mortgage Renewal Is Similar To Resetting Your Personal Financial Plan

For every one of our mortgage clients, the renewal period is not only a good time to consider should I renew my mortgage or switch banks, but it’s also a wonderful time to reconsider the following and adjust your mortgage:

a. Has your family income increased over the last five years?

b. Were are you in a subprime mortgage and now your situation has improved?

c. Do you have the ability to change the payment frequency?

d. Can you lower the amortization?

e. What type of penalties will you have if you break the mortgage?

f. Is the mortgage portable?

Generally speaking, we try to steer our clients into mortgages which have lower rates with maximum flexibility.

3. Never Renew Your Mortgage If You’re Not Happy With The Bank

When your questioning should I renew my mortgage or switch banks, consider this: your home is your personal security. It is where your family settles its’ roots. Our feedback from mortgages is that getting service from a lot of banks can be a hassle. Some phone calls are not returned for days. As well, appointments can take up to two weeks before visiting with a representative. Our office ensures that we return calls and emails the same day. More importantly, most of our mortgage companies have a phone help hotline during business hours.

Consideration should also be given whether they will provide any perks. These perks can include discounts on other products like credit cards and no fee bank accounts.

To conclude, we hope we helped Carol but also the other mortgage consumers. Remember that the bank does not like an educated consumer. It pays to learn.

Robert Floris is a Mortgage Broker. His office is located at 651 Fennell Avenue East in Hamilton, Ontario. If you would like to speak with Robert, he can be reached at 905-574-9200 #215. Alternatively, you can contact Robert here.

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