A spike in mortgage renewals, rising interest rates & the stress test rule add-ons seem to be conspiring to make refinancing your mortgage more complicated and more expensive. Rest assured it only seems that way and, while many of you looking to renew will look to your lender from previous mortgages, it’s important you always weigh your options.
A recent article in the National Post used a CIBC Report with stats that were really eye-opening. Around 47 % of all existing Ontario mortgages will need to be refinanced this year, according to CIBC estimates. The crazy part about that number is that it represents a hike of almost 35% from typical years. Are you among the 47%? If you are, you might also be aware that your renewal is coming at a time when rates may be surging higher.
In the days that followed the report, several of Canada’s big banks raised their posted rates for mortgages. Although, something else happened as well. Special offers began to trend and become more prominent. What does that mean for the 47%?
To back it up a little, we should probably look at the habits of people just like you. The truth is, many Canadians do normally renew their mortgages with the same lender. However, if rates being posted by banks are rising, yet some “special offers” exist elsewhere, should you really be rushing to renew with the same lender? If that lender is among the many who can only offer you what their bank has to offer, you may be missing out on the opportunity to rate shop with a professional that has access to multiple banks.
I know there are some mitigating factors keeping people from using a different lender. Between uninsured mortgages and being stretched financially, some people have circumstances that push them towards their current lender. A lack of negotiation power can definitely get in your way, but you don’t know about your situation unless you do a little digging. If this sounds like you, having a watchful eye to help you can help you realize you may not be in as bad of a situation as you think.
However, if you’re in a place of comfort and are going into your renewal with a little more flexibility, you shouldn’t be looking to rush your renewal. What you should be rushing is how soon you start your research into getting the best rate for you and your family.
Do you or someone you know fall in the 47%? Feel free to get in touch with ME anytime!