Mortgage Renewing Before Pending Ratedrop?

If your mortgage renewal is approaching and you’re concerned about locking in at higher rates just before they potentially drop, you’re in good company. Over 100,000 Canadian mortgages come up for renewal each month, facing the challenge of higher rates and increased mortgage payments.

Economists are now suggesting that rates may drop earlier than expected, possibly around mid-2024. If you’re contemplating renewing your term before this, you may wonder if you’ll be stuck with elevated mortgage payments when rates eventually decline. The good news is there are strategies to consider for a more favorable financial outlook.

Opt for the Lowest 1-Year Fixed Rate in Canada:
Matrix Mortgage Global, a leading national brokerage, specializes in competitive rates and mortgages. Our product line includes a low 1-year fixed-rate term, offering payments lower than any other 1-year rate available. This provides an opportunity to reduce payments immediately and renew at lower market rates at the term’s end, with no hidden fees.

Consider Short-Term Fixed Rates:
While the 5-year fixed rate is a popular choice among Canadians, given the anticipated rate drops, you might want to explore shorter-term fixed rates, like 2 or 3 years. These shorter-term rates are currently higher than 5-year rates, but your expert broker can help determine if they can help you save more over time.

Evaluate the Pros and Cons of a Variable Rate:
With variable rates potentially near their peak after a rapid increase cycle, opting for a 5-year variable-rate mortgage means you could experience rate relief with each central bank rate drop. However, it’s important to assess your ability to handle possible rate hikes due to economic and global events.

Extend Your Amortization:
Extending your loan time, whether with a 5-year term or a shorter one, may lower your payments even when renewing into a higher mortgage rate. This approach can help ease budget stress until lower rates become available.

Breaking Your 5-Year Term for a Lower Rate: If you prefer the budget certainty of a 5-year fixed rate but anticipate significant rate drops during your term, your expert broker can help you determine whether the penalty for breaking your contract is justified by the savings from starting a new term at lower market rates.

Timely Renewal:
Your renewal period begins 120 days before your contract expiry date. It’s essential to work with your expert mortgage broker to find the best rate and lender options and ensure you don’t miss your expiry date, which could result in a short fixed term at a higher interest rate.

Matrix Mortgage Global’s expert brokers are readily available to assist you in finding the best savings strategy, whether you’re a first-time buyer, renewing, refinancing, or looking for a new home. Don’t delay; get fast, expert mortgage advice to secure your best rate and enjoy a stress-free process. Contact Canada’s top Mortgage Broker today.