8 Key Considerations Before Renewing Your Mortgage

With so many choices out there, shopping for a mortgage can feel overwhelming… regardless of how many times you’ve been through it before. Some become overly focused on getting the lowest mortgage rate without even considering if the mortgage even suits their needs to begin with. As it is, choosing a mortgage based on rate alone can be a costly mistake. Let alone, choosing one that may not even suit your needs. Before even thinking about rate, we first need to determine the mortgage product best suited to you. There are things you may not have even considered that could end up costing you thousands. 

Understanding Your Needs

Just as you’d spend time finding the perfect home, choosing the right mortgage deserves equal attention. Every borrower’s situation is unique, and mortgages come with different features, pros, and cons. Before you dive into comparing rates, take a moment to reflect on your personal circumstances. Whether you’re purchasing a new property, refinancing your existing mortgage, or have a mortgage coming up for renewal, a clear understanding of your goals will guide you to the mortgage that fits you best.

Here are eight things to consider 

• Clarify Your Five-Year Vision 

Where do you see yourself in five years?

• Do you have plans to pay down your mortgage faster?

• Buying a vacation home or investment property?

• Switching careers or taking a sabbatical?

Your long-term plans will dictate the mortgage structure that serves you best. Not just the mortgage product… but how that product is structured. 

1. Evaluate Your Home’s Future Suitability 

Is this property the right fit as your needs evolve?

• Are you planning on growing your family?

• Empty-nesters looking to downsize?

• Multi-generation living on the horizon?

If your home won’t meet future needs, a flexible term or portable mortgage could save you penalties later.

2. Relationship Dynamics

Will your household change?

• Tying the knot or merging households?

• Potential separation or partnership shifts?

Anticipating these changes helps you choose terms that accommodate shifting finances and living arrangements.

3. Family Planning

Planning to start or grow your family?

• Budget for childcare, schooling, and extra living space.

• Look for mortgages with more payment flexibility or with potential to absorb new expenses.

4. Plan for Home Improvements

Do you have renovations or major upgrades on the horizon?

• Adding a new kitchen, bathroom, or addition?

• Consider a mortgage with a Home Equity Line of Credit (HELOC) or equity take-out. (Talk to us about putting together the right strategy). 

• If purchasing a new home, then it may be possible to include the cost of the renovations into your new mortgage. 

This lets you fund projects without costly mortgage break penalties or refinancing fees.

5. Assess Job Security

How stable is your employment? 

• Could a career change be coming?

• Permanent role vs. contract or commission-based work?

6. Anticipate Geographic Moves 

Planning on moving within the province, to another part of Canada, or even abroad?

• Choosing a lender with more flexible portability features could save thousands in break penalties. 

• A shorter-term mortgage may prove to be more cost effective. 

7. Entrepreneurial Aspirations

Are you considering launching your own business or side hustle?

• New ventures can impact your qualifying ability and cash flow.

• Prioritizing a lower payment over a lower rate might be the better choice (and no, the lowest rate does not always mean the lowest payment). 

Research and Compare your Options 

Once your “big picture” is clear, it’s time to explore your options:

• Fixed vs. Variable Rates: A fixed rate locks in stability, while a variable rate can offer savings if the prime rate dips. But be prepared for potential rate hikes… and yes, expect them within the next few years. 

• Term Lengths: Shorter terms (1–3 years) give you flexibility to renegotiate more often; longer terms (5–10 years) provide rate certainty.

• Prepayment Privileges: If you plan to make extra payments, confirm how much and how often you can prepay without penalty. But some lender prepayment privileges are not always what they seem. Some may not give you as much flexibility as you had originally thought. 

• Portability & Transferability: If there is a chance you’ll be moving before your term ends, a portable mortgage can save thousands in penalties.

• Additional Lender Restrictions: While the lowest mortgage rate is important, the real savings can often be found within the terms and conditions. All mortgages are not created equal. In fact, they can be somewhat misleading at times. It doesn’t help your bottom line if the mortgage is too restrictive to accomplish your goals. 

Final Thoughts 

With your goals aligned and your research underway, partner with a mortgage professional who listens first and advises second. Share your reflections from the eight questions above, and let them show you how different products map to your plans.

The “best” mortgage isn’t the one your neighbor has, or the one you’ve always gone with in the past… it’s the one tailored to your life today, your ambitions tomorrow, and your budget every step of the way.

Ready to get started?Reach out to us today, share your answers, and let’s find the mortgage that’s right for you… no cookie-cutter solutions, just a plan built around your needs.