Mortgage Renewal
Mortgage renewals are one of the most neglected decisions
made during the life of a mortgage. Many homeowners stay with their existing
mortgage lender because they believe it is too time consuming to shop around
for a better rate. Or, they simply think that the offer from their existing
bank is the best deal available. This is not correct.
At renewal time, banks mail their renewal notice to
their clients with the posted bank rates and expect clients will simply
sign the form and renew their mortgages. Did you know that 70% of renewing
clients simply sign that renewal form? The table below shows how much money clients may lose by doing this.
If clients try to negotiate their rate, their efforts may get them as little as 0.25% to 1.00% off the bank rates. Better discounts are usually reserved for clients that have other services with the bank such as bank accounts and investments with the bank
Keep in mind that the bank branch’s profit is in what
they do not give you.
The answer to getting the best rate lies in working with a qualified Mortgage
Broker with an AMP credential.
We are able to gain competing offers on your mortgage
business and we usually return with a rate that is 1.0% to 1.75% better than
your Bank would offer you. This can translate into incredible savings!
(See below with only a 1.30% savings)
If your mortgage is up for renewal, and you are looking for
the best rate available, we will do your mortgage shopping for you. We will
find a mortgage at the best rate currently being quoted in the market for
the term of your choice and on the conditions you want. Provided you are a
“qualified borrower” with respect to the amount you want to borrow, there is no
fee payable to us for this service.
Here's an example for you to consider:
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Bank Renewal Mortgage
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The Mortgage Centre Negotiated
Mortgage
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Mortgage Principle: $150,000
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Mortgage Principle: $150,000
|
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Rate for 5 yr Term: 5.79%
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Rate for 5 yr Term: 4.49%
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|
Amortization: 25 years
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Amortization: 25 years
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Monthly Payment: $941.07
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Monthly Payment: $829.38
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Savings Monthly: $0 / month
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Savings Monthly: $111.69
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Mortgage Owing at end of term: $134,351
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Mortgage Owing at end of term: $131,672
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Savings on Principle: $0
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Savings on Principle: $2,679
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Your Savings over a 5 year term is $9,380.40.
The above savings are calculated as follows
from the table above: Monthly savings on payments over the 5 years is $111.69 x
60 months (5 years) = 6,701.40 plus the savings on the difference on the ending
principle. $2679.00 + $6,701.40 = $9,380.40.