For most home owners, a mortgage renewal process is an inevitable occurrence in our life. Auto renew mortgage with your current bank (lender) seems convenient and easy, but is it the best option or right decision? The answer is “not always”.

At renewal time, it is the perfect opportunity for financial review, adjustments and shopping for a lower rate. Here are five tips for homeowners to save money when looking to renew the mortgages:

Update your financial goal – your financial situation could change. It’s the perfect time for debts consolidation if you had other major debts. Maybe it’s time for equity take out if you intended to do some investments. Or maybe you planned to do title change adding/removing someone from title of property, it’s right time to do so.

Start earlier – 3 or 4 month prior to mortgage renewal, start to ask for mortgage rates in the market. You will need time to do research and get yourself well educated in order to make best/right decision.

Rate type – fixe or variable? Short term or long term? It is a decision you have to make depends upon your financial plan and personal situation. Research indicates that variable rates outperform fixed rates over the long-run, with fixed rates outperforming only a minority of the time and mainly at the trough of economic cycle.

Get rate locked – if you decide to switch lender for your financial needs, it’s very important to start early to submit the application and lock in a rate. Generally you can lock in a rate 3 months prior to renewal date, if rates go down, you will have the lowered rate. If rates go up, your locked in low rate protected you from the increase.

 Know the mortgage you get – interest rates are important for mortgage renewal, but it is not all. You should understand all the features of the mortgage such as penalty clause, fees incurred, special conditions (sale clause, high penalty clause, single mortgage or combined with HELOC as all in one product, etc.). For example, if you intended to sell the property during the next term, fixed rates are probably not a good option since penalty for breaking fixed rates are much higher than variable rates 

 Please click here for the best rate for mortgage transfers or if you would like to know what options you have, please reach out Valueland Mortgage at 1 877 479 9998 or contact us here.

The latest numbers from the Canadian Real Estate Association help to explain why worries about a bubble are on the rise.

Sales activity in February jumped nearly 40% compared to a year earlier, setting a new record.  Sales rose nearly 7% compared to January.  The national average price surged by 25% year-over-year.  New listings rebounded month-over-month in February but inventories remain at record lows.  Nationally there is just 1.8 months of supply. 

The Bank of Canada has expressed concerns about overheating.  Governor Tiff Macklem has noted that there are signs that real estate speculation is on the rise.

"What we get worried about is when we start to see extrapolative expectations, when we start to see people expecting the kind of unsustainable price rises we've seen recently go on indefinitely, and they're basing their decision on those kinds of assumptions," Macklem warned earlier this month.