In 2023, the most common inquiry we have been getting from you, our loyal clients, is how to treat an upcoming mortgage renewal in the current interest rate environment.

Anyone that has had to renew a mortgage since the summer of 2022 will tell you that it's been a very different experience when comparing it to past mortgage renewals over the last 20 years.  There is the inevitability of interest rates being higher, but there are some other issues we are seeing:

Sadly, over the last year, there appear to be a couple of the Big Banks that are showing no initiative to compete with the other Big Banks on interest rates.  We can pass along that intel we have received from executives at these particular Big Banks, as they are not expecting that to change until, at best, spring/summer of next year.  

One of the biggest issues facing a lot of clients that have mortgage renewals coming up is that the higher interest rates combined with the government mandated 'Stress Test' means that the number of mortgage applications getting approved is at record lows when compared to the past two decades.  Even if a client wanted to move their mortgage to a different bank for a better interest rate, the chances are high they may not be able to get approved to do so.  This is extremely different from the past years when getting approved to move your mortgage elsewhere was relatively easy if you had the income and credit to meet the bank's criteria.  

What makes this a major issue is that the if the banks know that it's very hard for borrowers to get approved to move their mortgage elsewhere, then they can play 'hardball' on mortgage renewal rates, knowing that some borrowers will not have a choice to move their mortgage and thus will be forced to take what the bank has to offer.

The most important thing you can do is: Get AHEAD of your mortgage renewal!

This means making sure to reach out to our office at least 6-8 months before your renewal date.  This will allow us to see what kind of options you'll have in advance of your renewal date.  If your file is approvable, then we can begin to lock-in interest rates from multiple lenders to protect you in the event that your current lender tries to play hardball, or if interest rates rise during that time.  If your file is not in a position to be approved with another lender, we can let you know well before your renewal date what would be needed to strengthen your file, and we can make concession plans in the short-term that may be optimal to you.  We can also help in providing 'ghost leverage' whereby we provide you with a 'ghost' rate that you can take back to your bank to see if it will motivate them to lower their interest rate offers to you.

This is a question we have been getting more and more from our clients over the past year.

So here are some things we've been doing to help people with this:

• Extending the mortgage amortization period.  For example, if a borrower has 15 years left on their amortization and we stretch that back over a 30-year amortization, this will help to drastically reduce the borrower’s mortgage payment. *This does not have to be a permanent change, as amortizations can be reduced back using pre-payment privileges or again at the next mortgage renewal*

• Consolidating other higher interest consumer debt (like credit cards, loans, and lines of credit) into your mortgage, thus reducing your total overall monthly payments

• Pulling out some equity and using it as a "cushion" each month to help cover any monthly expense deficits until interest come down. We call this 'Lend to yourself'. Essentially using equity that you have built to help you get through these tough times during higher interest rates.

If you have a mortgage renewal coming up in the next year or if you are struggling with your mortgage payments, do not hesitate to reach out to us, our team is ready to work with you and see what we can do to help.

Just a friendly reminder to come visit us on our socials, where we put out a ton of videos with tips and information to help you navigate the wild world of mortgages! Check out the links below and give us a follow!

As always, if you have any questions or want to do some mortgage planning, feel free to reach out to us at: