In December 2024, the Bank of Canada announced another 0.50% jumbo rate cut, and more reductions seem likely as other central banks respond to promising inflation data. Despite these signs, uncertainty still looms over the Canadian economy, and markets are more unpredictable than ever. If your mortgage is set to renew this year or in 2026, don’t wait—rising rates could hit harder than expected. If your renewal date falls within the next three to six months, now is the time to speak with a mortgage professional and lock in your best option. Don’t risk missing out—act now to protect your financial future.
This is especially true if you’ve seen a reduction of household income due to family changes, employment loss, or incurred additional unsecured debt like credit cards, personal loans and lines of credit since your last renewal or since you purchased. Any of the above might not impact your renewal, but the whole reason you plan ahead on things like this is to make sure you aren’t left without options by leaving it to the last minute. Planning ahead is the smart move.
Did you know that many Canadians sign the renewal letter they receive in the mail (or online) from their current lender without a second thought? They assume that the lender is looking out for their best interest (pardon the pun😊) . The truth is, all lenders know this and rarely offer their best rate or terms at the onset of negotiations. And that is exactly what a mortgage renewal is, a negotiation. And I would be remiss if I didn’t say that being a former banker turned mortgage agent, the majority of the banks I worked for (and their profits on mortgages) relied heavily on renewals and the consumers’ lack of research and diligence when it came to renew.
Don’t be led to believe that a mortgage renewal is a simple transaction, that you should just take what your lender offers you, look at all your options. Now, this doesn’t mean just looking at all the terms offered by one lender; it means looking at products from multiple lenders. You do this by working with an independent mortgage professional.
When you work with an independent mortgage professional, you receive the expertise of a trained professional who’s main focus is just mortgages and nothing more. Unlike a bank employee who is mandated to meet several sales goals or targets by not just mortgages but investments, credit cards, loans, new bank accounts, insurance and more. The truth is, an independent Mortgage Agent or Broker, is working for you and not the bank; at no cost to you! One key misunderstanding by many Canadians is around how they are compensated. In fact, the majority of the time the brokerage the mortgage agent or broker you work with is paid by the lender! So you get the best of both worlds, he/she works and advocates for you and they are paid by the incoming lender and take care of the heavy lifting!
As we move into an uncertain economic future, you might want to look at mortgage terms and options that might be different from what you’ve gone with in the past. Just because you took a 5-year term previously doesn’t mean you have to go with another 5-year term. You have lots of options. And don’t forget the penalty options versus big banks use to calculate breakage costs versus non-bank progressive (and federally regulated) lending institutions.
Interest rates are slowly coming down, making it a perfect time to ensure you’re getting the best deal on a mortgage. I would welcome the opportunity to help you with that. Contact me anytime! At the very least, by having a quick conversation, we can assess your financial situation and see if your renewal letter or online offer you received is a good deal. Click below to book a call instantly with me if you would like to discuss your upcoming renewal.