Eat. Sleep. Pay your mortgage. Repeat.

Seems simple enough, doesn’t it? Just when you thought you had gotten the hang of homeownership, your mortgage lender reaches out: Your mortgage term is coming to an end and it’s time to renew.

Do I have to renew my mortgage with the same lender?

Nope, you don’t have to renew your mortgage with the same lender you started with. Just like you don’t have to renew your cell phone contract, Internet provider or meal kit subscription, it can pay to shop around. In fact, shopping around for the best mortgage rates can easily translate into up to $3000 per year in mortgage interest saved.

What are the pros and cons of renewing my mortgage with the same lender?

Here’s the upside to renewing with the same lender: If you’re okay with the terms and conditions of their mortgage offer, you can just sign on the dotted line and never have to think about it again (until the next mortgage renewal, at least.) You can skip the process of having to re-qualify. As long as you have made your mortgage payments on time, your lender likely won’t ask to look at your debt service ratio.

According to Ali Hussin, Head of Mortgage Advisory at Perch, there is one big downside to sticking with the same mortgage lender: mortgage lenders have little incentive to offer you a good mortgage rate. They know most people will take the easiest option, which is to renew without shopping around. Their mortgage offers won’t be as competitive, and they’re expecting you to just take it.

You can view the current mortgage rates in Canada from banks, mortgage brokers and Perch or see your personalized mortgage offers (and even compare a current mortgage offer to what else is on the market).

What’s the process of renewing my mortgage with another lender?

Here’s the simplest way to switch mortgage lenders, in steps:

1. First, shop around and see what mortgage offers you’re eligible for. You can do this by calling a bank or mortgage broker, gathering and submitting all your information, waiting several days for them to respond and be presented with your mortgage offers. However, this method can be quite tedious since it involves a lot of waiting and resubmitting documents. Alternatively, you can sign up to Perch, upload your documents to our secure online portal, and view mortgage offers from multiple lenders in one go. If you’re not sure which mortgage to pick, you can strategize with your dedicated Perch mortgage advisor who will explain the pros and cons of each option, and answer any questions you may have.
2. You’ll go through the pre-approval process, similar to what you did when you initially bought your home. At Perch, you can get pre-approved in as little as 20 minutes if you already have all your documents prepared and ready to upload.
   
3. Your mortgage advisor will review and submit your mortgage application.
   
4. Once you have satisfied any conditions and the lender has approved your mortgage application and closed the deal, you’re all set. Your new mortgage payments will start, and you’re good to go.

Do I have to get a mortgage from a bank?

The short answer is: of course not! Many financial institutions in Canada offer mortgages, not just banks. Due to their physical presence with their bank branches, banks are the most well known. However, you can also get a mortgage from any of these lenders:

• Credit unions
• Mortgage companies
• Insurance companies
• Trust companies
• Loan companies

You may not be familiar with the name of some mortgage lenders like you are with TD or RBC, but rest assured they are all regulated in the same way. The easiest way to shop for a mortgage is to use an experienced mortgage broker, one who is familiar with mortgage products from multiple lenders.

One downside of getting a mortgage through your bank is that you’ll only have access to that bank’s mortgage products, making it less likely you’re getting the best deal on the market. The downside of using a mortgage broker is that you’re relying on their knowledge and familiarity with multiple lenders, which is done manually and prone to human bias, plus your broker might not be very good.

Perch enables you to shop and compare 1000+ mortgage products in just a few clicks, making what is typically a tedious and manual process that much quicker.

What happens if I let my mortgage term end, and haven’t renewed or gotten another mortgage?

Your mortgage lender will make every attempt to contact you well in advance of your mortgage term ending. It’s in your best interest to shop around for the best mortgage rates before the term ends, or to simply renew with your existing mortgage lender.

If you don’t respond to your mortgage lender, and you haven’t gotten a mortgage from another lender, then your original lender may automatically renew you in a new mortgage term, which could come at a significantly higher rate.

Getting a mortgage shouldn’t be a difficult process, and here at Perch we’re here to help you get up to speed with everything you need to know when it comes to homeownership.