The major banks currently renew somewhere between 80-90% of the mortgages they hold, and the majority of those renewals are done at posted rates (posted rates are the rates that are publically advertised by the banks, and the rates also used for qualifying for a variable rate mortgage). Many clients, especially those with a steady job and decent credit, can get way better than posted rates (for example, the posted rate at most banks is currently around 5.39%, but many of my clients are currently able to get a 5-year fixed rate of around 3.49% – that’s 1.9% cheaper!). Paying posted rates could end up costing over $18,000 in just 5 years on a $250,000 mortgage amortized over 25 years. That’s not chump change!
Sometimes getting a better rate from the banks is as simple as asking for it – but why would you want to do business with a company that won’t give you the best rate up front? Save yourself tens of thousands of dollars and make sure you either negotiate a better rate at your branch every time your mortgage comes up for renewal, or even better, ask for some help from a licensed mortgage broker, and let us help you get the best rate and options for your mortgage renewal. We can survey all the lenders we have access to and help you not only get the best rates available to you, but also figure out which options (pre-payment privileges, term, etc) best fit your current needs and lifestyle requirements.
So the next time you receive a renewal notice from your bank in the mail, remember that it’s worth the time to negotiate a better rate – just signing it and sending it back could cost you thousands every year.
