Should you renew your mortgage early for a better rate?
January 22, 2025 | Posted by: Sherry Corbitt
The first 3 Steps to do when deciding if an early renewal is worth it
It can be an intelligent decision to explore a refinance in today's low-rate environment, even if your maturity date is not up yet. Many factors go into whether a refinance makes sense right now or not. The main thing to consider is if your household budget will improve with the lower rate mortgage or by consolidating some existing higher interest and higher payment debts. Another critical factor is the cost to make a move now. What are your penalty and additional costs to factor in?
Step 1: Gather your numbers so you can make an informed decision
Before calling a Mortgage Broker to make a scenario comparison of what you have now and what you may want, get in touch with your existing lender to confirm the balance and what their penalty is as of today if you were to leave. The truth is, we can't get far into running scenarios if we don't know if your penalty is $2500 or $25,000, so knowing that will help. Also, have your current mortgage balance, payment amount, payment frequency, maturity date, and rate ready.
Step 2: Review other debts you have so we can decide if it makes sense to roll in those debts
We will consider the current interest rates, time left on those debts (like a car payment), and payment amount. We can then see if a lower rate on the mortgage will benefit from having these debts consolidate.
Step 3: Time is your friend if your maturity date is quickly approaching
We traditionally like to work with a minimum of 4 weeks before your maturity date, but we can work within a four-month time frame.
Give us a call with the above info, and we will run some scenarios to decide if now is the right time to make a change. We can run different scenarios to find the right balance to take advantage of the low rates. So there is never a cost for a review, and you will gain the peace of mind of knowing the best path forward.
Sherry Corbitt, Mortgage Broker
Providing solutions, not just rates.
