Note: I have been compensated for this post, but all views and opinions expressed are entirely my own
There’s no denying that purchasing a house will be most likely be the biggest financial commitment you’ll make in your entire life. This is the one area where you’ll want to try to save the most money. Aside from increasing the amount and frequency of your payments, and making a lump sum payment, there is the option of getting a better rate once it is time for renewal. So of course, it makes complete sense to spend your time researching and comparing the best rate.
There are various types of mortgages such as fixed or variable, for various lengths of time. It’s important to determine which one works best for you, depending on your situation. Everyone is different.
Rather than waiting till your mortgage rate renews automatically, it’s best to start shopping around a few months before. Shopping around can save you thousands of dollars. Mortgage rates are still quite low and even lower than when we first purchased our house four years ago. We got our rate for 2.94% with a major financial institution, which seemed low at the time.
You do not necessarily have to renew your mortgage with the same lender. If there is a better rate out there, you can choose to move to another lender or negotiate with your current lender. Don’t just limit your search to the big banks either. There are a lot of lower rates on the market provided by brokers, credit unions and smaller banks. Through a rate comparison site, like RateSupermarket.ca, your search encompasses a much broader range of financial institutions, so you don’t have search multiple sites.
Just think of them as the Expedia for financial products.
RateSupermarket.ca was founded in May 2008 and primarily compared mortgage rates, but quickly expanded to include other financial products such as insurance, bank accounts and credit cards. Part of the site’s mission is to keep Canadians well-informed and be able to make wise financial decisions.
Users can browse mortgages based on several different factors by city, province, fixed or variable rate or by institution. As an avid price matcher at grocery stores, I like having the power of being able to request a lower price on a certain item. I definitely feel the same way when it comes to mortgage rates.
RateSupermarket.ca Has a Variety of Mortgage Tools Available to Help With the Process
Aside from being able to determine your payments and how much of a mortgage you can afford, Ratesupermarket.ca provides a third type of mortgage calculator – the mortgage penalty calculator. This can help you determine the potential costs if you decide to refinance or pay off your mortgage early. While you can break your mortgage earlier and switch to a better rate, it’s important to proceed with caution and crunch the numbers to make sure you will be saving a decent amount of money in the long because the penalties can run high. A fixed-rate mortgage has a much higher penalty than a variable rate mortgage and is more difficult to calculate.
When I crunched the numbers, in our case, we would be paying a hefty penalty. Thus, it wouldn’t be worth it.
Mortgage rate alert – This is similar to the idea of the alerts you sign up for when you want to be notified of a price change in your desired flight. If the time for you to renew is fast approaching, you can sign up to receive daily updates to mortgage rate changes.
Renewal reminder – I signed up to have an email reminder 120 days in advance of when my mortgage renews. This way, it plants the idea in my head with plenty of time to start looking around prior to the date.
Although we still have a couple of years before we need to renew, it’s not a bad idea to check what the current rates are and see how they compare to what we paid.