Hi Milton
I get so upset when I see and hear of clients who have signed back their bank mortgage renewal without asking any questions or even exploring if the rate is competitive. In most cases the rate offer is not competitive and majority of Canadian's sign those letters back without even asking if the rates are competitive, thus wasting thousands in extra, unnecessary interest.
I've just been referred to another client whose 5 year mortgage is up for renewal in May with an institutional lender. They are coming off a 5 year rate of 3.89%. The bank sent him an early renewal offer with a promotional rate of 3.75% for a new 5 year term with an expiry date on the offer. Under pressure to meet the expiry date, his accountant suggested he give us a call just to confirm the rate is competitive.
Good thing he called. The "promotional rate" and time stamp on the offer are just an attempt to put clients under pressure to re-sign without time to shop around. Maturing in May, he has lots of time to shop around and the 5 year rates are currently around 2.64%. Promotional rate of 3.75% - yeah right!!!
There are a number of options available on your renewal. If your bank is not going to reward you with competitive rates, then you do not have to stay with them. Here are 2 options: 1) If you do not need any equity out, you can do a No Fee Transfer of your mortgage to a new bank with no legal or appraisal fees. 2) If you do need equity out for any reason, you can then do a refinance. We have one bank that will do your refinance at no cost to you by covering the legal fees and will refund most of the appraisal cost. Most banks will not cover the legal fees. Some will refund appraisal fees.
Please don't get caught. Every $ saved is a $ closer to being mortgage free.
_________________ Warwick Johnston Milton Mortgage Specialist at RBC 647-274-6029
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