When to Switch Mortgage Providers
You receive your mortgage renewal notice in the mail and it seems so easy to just stay with your current mortgage provider. Often your current mortgage provider does not provide you with the best rate or terms and conditions. When you get that renewal notice, check with a mortgage professional to ensure that you are being offered the best rate and mortgage features.
Switching to another lender for a better interest rate could end up saving you thousands of dollars over the term of your mortgage. You have $200,000 remaining on your mortgage and your current lender offers you a 5 year fixed mortgage at 3.95%. With this rate your monthly payments would be $1,203 and the interest you will have paid over the five year term would be $35,788. You do your due diligence and contact me. I find you a rate of 3.35% at a new lender and your monthly payment would be $1,142 and you pay $30,223 in interest over the five year term. As you can see there would be significant savings by switching to a new lender. Your monthly payment would be reduced by $61 and your interest savings over the five year term would be $5,565. There are some fees associated with switching mortgage providers, including legal fees, an appraisal if one is required, and a discharge fee of approximately $250 to transfer your mortgage. The new lender will generally cover the legal fees and appraisal.
If a new lender can offer better mortgage features, it might be beneficial to switch providers. These features could include better prepayment options and prepayment penalties as well as having portable or assumable options.
Before you renew with your current mortgage holder, check with a Mortgage Professional and see what they can do for you.