New Mortgage Renewal Rules Could Mean Big Savings for Homeowners
Matrix Mortgage Global – New Mortgage Renewal Rules Could Mean Big Savings for Homeowners
If you are among the nearly half of Canadian homeowners whose mortgage is up for renewal in 2018, we’ve got some good news for you. Some recent changes to Canada’s mortgage renewal rules could save you some big money.
In October of 2016, if you were refinancing your mortgage, government regulations prevented you from getting default insurance. Transfers between lenders could still be insured by only if they didn’t add to the total amount or length of the amortization period. The problem was, that if the mortgage had been refinanced any time in the past, it still could not qualify for default insurance upon transfer.
This meant that it was difficult for homeowners who had previously refinanced to get a better deal with a new lender since mortgages with default insurance can typically get rates that are at least 20 basis points better. Twenty basis points translate into a savings of nearly $1900 over a five-year period on a $200,000 mortgage.
This changed on April 30th of this year when Canada’s default insurers announced they were ending the restriction against insuring mortgages that had previously been refinanced. This is good news if you are renewing your mortgage and you want to shop around to get a better rate. As long as you don’t add a balance to your mortgage and your amortization period stays under 25 years, it will be possible to ensure your mortgage – even if you have refinanced in the past.
If you are thinking about changing lenders when you renew your mortgage, here are a few tips to keep in mind:
- You’ll be able to get the best rates if your mortgage is already default insured.
- When switching lenders, there may be legal and appraisal fees. Some lenders will absorb this cost for you (if you have a standard charge mortgage) and others will allow you to roll them into your new mortgage. Your mortgage broker will know which lenders follow which practice.
- If your current mortgage was insured prior to October 17, 2017, some lenders won’t require you to pass the financial stress test. Your mortgage broker will know who these lenders are.
If you have a mortgage that is coming up for renewal this year, it is a good opportunity to lower your payments as well as the overall amount that you’ll have to pay for your home. These new rules could mean big savings if you take the time to shop around and find the lender that is right for you. At Matrix Mortgage Global, we have access to a large pool of lenders and would be happy to help you save money when you renew your mortgage. Call us today at 1-877-371-5293.