Mortgage renewals

This week was a very important week for me. My first mortgage had come up for renewal. That means I have owned my property for nearly 5 years. We got to renew a little bit early, and that is why I am sharing this information.

Banks allow for an early renewal up to 6 months without penalty. They would rather keep you as a customer than risk you going to a competitor. In order for an early renewal to make sense, you must know the competitive interest rates. In my case, I was able to reduce my interest rate by 3.75%. It has meant a tremendous savings. It will allow me to pay off my mortgages that much quicker.

In essence, by renewing early, I have been able to save 3.75% over the 6 month term. In terms of time, I have likely saved myself nearly a year's worth of payments. The compounding effect of interest is amazing, so it was nice to know that I'm going to be closer to paying off my debts sooner rather than later.

I would also like to mention that I was able to "cannibalize" some of my mortgages. Since I have more than one property, I have more than one mortgage. By taking advantage of the lower rate that exists now, I am able to make additional payments by increasing my mortgage a little bit on the renewal and applying the extra cash to my mortgages with the highest rates.

If you are in the market for mortgages, please take the time to shop your mortgage. You can get an idea quickly how good your mortgage rate is. Talk to a professional about the different options that are best suited for you. You may not need a standard 5 year term. You may opt for a shorter term knowing that you may not be living in the same house, or have the same job in 5 years.

Have a nice weekend!!!