With the Bank of Canada increasing the overnight lending rate today (the rate banks lend each other money) and the banks expected to increase their variable rate mortgage to 7.20% today getting the right renewal rate is on the mind of every homeowner.

The five-year fixed rate increased by over 1% in the last twelve months and the five years variable rate increased by 2.50% over the same period, those who were playing it safe last year by taking a one-year mortgage will be paying more when their mortgage renews this year as mortgage renewal rates have been skyrocketing for the last nineteen months.A one hundred thousand variable rate mortgage with a 25-year amortization would have increased by $203.08 in the last year while a 5-year fixed rate mortgage would have increased by about $56.36.

If you have a mortgage coming up for a renewal though, you might have a shocker and could be paying almost double what you are currently paying. Have a look at ten things you might want to do to have a good chance of lowering your renewal rate. As you go through the list, you will notice that some of the items are ongoing actions you must take to keep your mortgage renewal rate low.

1. Start the process early: Initiate the mortgage renewal process at least four to six months before your current term expires. This allows you ample time to research and explore different options.

2. Evaluate your financial situation: Assess your current financial standing, including your credit score, income stability, and debt-to-income ratio. A strong financial profile increases your chances of securing a favorable renewal rate.

3. Research current mortgage rates: Stay informed about the prevailing mortgage rates in Canada. Monitor rates from various lenders to understand the market and negotiate effectively.
4. Contact your current lender first: Reach out to your existing lender to discuss renewal options. They may be willing to offer competitive rates to retain your business. Use this opportunity to negotiate and inquire about loyalty discounts or special offers.

5. Shop around and compare offers: Don’t settle for a renewal offer without exploring other options. Contact multiple lenders, including banks, credit unions, and mortgage brokers, to gather different renewal rate quotes. Compare terms, conditions, and rates to ensure you get the best deal.

6. Consult with a mortgage broker: Engage the services of a mortgage broker who specializes in Canada’s mortgage market. They can provide access to a wide range of lenders and negotiate on your behalf to secure a favorable renewal rate.

7. Leverage your payment history: Highlight your consistent payment history to demonstrate your reliability as a borrower. A good track record may help you negotiate a better renewal rate.

8. Consider a longer term: If you are comfortable with a longer mortgage term, such as five years instead of two or three, it may provide stability and potentially offer a more favorable renewal rate.

9. Be prepared with documentation: Gather all necessary documentation, including proof of income, employment details, bank statements, and tax returns. Having these documents readily available will expedite the renewal process.

10. Negotiate and ask for a better rate: Don’t be afraid to negotiate with your lender or mortgage broker. Present your research, demonstrate your financial stability, and inquire about any available discounts or promotional rates.

Remember, each borrower’s situation is unique, so it’s essential to assess your individual circumstances and tailor these tips accordingly. By being proactive, doing your research, and engaging in negotiations, you can increase your chances of securing a favorable mortgage renewal rate in Canada.