So your mortgage term is about to end and it’s time to renew for another term. How do you do that exactly?

In this article we are going to go over the basics of mortgage renewals and give you everything you need to know. When interest rates are rising like they have been, many homeowners are worried about what this means for their mortgage renewal. While it may be true that you’ll have to renew at a higher rate than your first terms, it’s still important to know what you can do to get the best rates on your mortgage, and make the right financial decision for yourself.

How to renew your mortgage with the same lender:

If you have your mortgage with a lender and plan to stay with them, renewing your mortgage is a simple process. Usually the lender will reach out to you, likely via email, and offer you a renewal at their current rates. For example they might offer to renew you at a 3 year fixed, a 5 year fixed, and a 5 year variable rate. This usually happens any time within 90 days from the maturity date of your mortgage term. If you want as straightforward a process as possible you can choose one of these options and your lender will take care of everything for you.

If you used a mortgage broker instead of a bank, the process will likely be very similar, although you might want to contact your mortgage broker earlier to confirm the best available rates. If you’re getting your mortgage through Perch our pathfinder tool is designed to give you all the tools you need to do things yourself. A nice thing about renewing with the same lender is you don’t have to re-qualify for the mortgage. Your current lender has already qualified you for your current mortgage, and renewing can be as simple as signing on the dotted line (or e-signature). 

However, the downside of going with your current lender is they already have you as a customer and probably won’t bend over backwards to get you the best rate. Most people end up renewing with the same lender, so there’s little incentive to keep them from switching. If there’s ever any doubt about your mortgage renewal, it can’t hurt to reach out to your lender and ask them about the process. At Perch, we have dedicated mortgage advisors ready to answer any questions you have.

Shop for rates

Regardless of whether you ultimately end up renewing your mortgage with the same lender, it’s a good idea to shop around and see what rates you could qualify for. If your current mortgage is with a bank, you might be able to get a better rate from a mortgage broker who has access to multiple lenders. Getting a better mortgage rate, even a small difference percentage wise, can save you a lot over the life of your mortgage.

How to renew your mortgage with another lender:

Yes, it is in fact possible to renew your mortgage with another lender. In fact, you can do a mortgage switch at any time, you’ll end up paying penalty fees but many times it ends up still being a good move depending on your goals. If you’re trying to decide if the cost of breaking your current mortgage is worth the expected savings of using another lender, our mortgage penalty calculator can help.

The most common reason to switch to another lender is simply better rates. If your current mortgage is with a bank you’ll only have access to their mortgage offers. On the other hand if you go with a mortgage broker like Perch, you can access rates from many different lenders, including the banks. 

If you go with a digital mortgage brokerage like Perch, you could end up saving thousands over the life of your mortgage. 

So here’s the process to renew your mortgage with another lender using Perch as an example:

• First, sign-up and upload your documents. 
• From there you’ll be able to view offers and if needed consult with a mortgage advisor who can answer any questions. 
• Next you’ll go through the same approval process as you did when you first got your mortgage which involves a stress test and checking your credit score. 
• Finally when your mortgage is approved, there’s nothing left to do but sign! 

But don’t I have to do something with my previous lender? Nope! If you’re not breaking your mortgage early, renewing your mortgage with another lender is straightforward and your mortgage broker will take care of everything on the back-end for you. 

What happens if I don’t renew my mortgage by the maturity date?

If you’re reading this article after your mortgage maturity date has passed, don’t worry you’re not suddenly going to owe thousands of dollars in fees. If you let your mortgage maturity date pass without renewing, you would get automatically enrolled into a mortgage with your current lender, usually at a higher interest rate than you could have got should you have called to negotiate earlier. In this case, you might want to look into other mortgage offers from different lenders and then calculate if it would be worth it for you to break your mortgage to switch.

If you happened across this article but are still in the process of getting your first mortgage, Perch offers same day approvals and some of the best rates on the market. If you want, we’ll also help you every step of the way with articles like this one and dedicated mortgage advisors.