Four Things To Think About Before You Renew Your Home Mortgage

11 May 2016
 Categories: Finance & Money, Blog

When you're a young homeowner, the world of mortgages can easily sound like a second language. It's important, however, to avoid just going through the motions with your banker or mortgage broker—for you to feel comfortable with the mortgage you're getting, you need to be engaged and ask questions when you don't understand something. Once your mortgage is set to be renewed, you might find yourself just wanting to agree to whatever package is offered and get the process over quickly. Instead, try to take things slowly, do some thinking about the state of your finances and ask any questions you have. Additionally, here are four things to think about before you sign.

Money For A Lump Sum Payment 

If you've been able to set some money aside over the previous few years, now can be an ideal time to put a lump sum on the principal that you owe. Some open mortgages allow you to make this payment at any time, but you should always be able to make a payment when your mortgage is up for renewal. Remember, whatever you can pay down now will mean either a shorter mortgage term or a lower payment.

Payment Frequency

It's common for people to have their mortgage payments taken out of their bank account every two weeks, but work with your lender to see what other options are available. Weekly payments are often appealing and can save you a considerable amount of money over the life of the mortgage. If you're in a financial position to make this change, ask about it.


Refinancing is a viable way to free up some money for a major home renovation. If you're thinking about moving forward in this manner, the period immediately before you renew your mortgage is arguably the best time to refinance. Refinancing in the middle of your mortgage term can result in a surcharge, but there will be no such penalty for refinancing before you sign your new paperwork.

Shopping Around

If you're happy with your current lender, you might not be eager to switch. However, it can still be useful to talk to a different lender about its best rates and possibly use this information to help negotiate a better renewal rate with your current lender. Keep in mind that you'll need physical proof — the offered rate in an email, for example—to provide your current lender. You can't simply say you were offered a better rate; you need to show the quote you were given.