November 29 2023
Interest Rates Are High and My Mortgage is Up For Renewal: What Should I Do?
When your mortgage is up for renewal, especially in a high interest rate environment, it can feel stressful. Will I be able to afford my home at a higher interest rate? Do I need to sell my current home? It’s likely that several questions are running through your mind. To make things easier, here are some key factors to consider if your mortgage renewal is around the corner.
1. Assess your current financial situation
Before making any decisions, take a moment to check in and review your finances. Has your income changed since you locked in your initial mortgage? Have you paid off other debts since then? What are your financial goals? Understanding your financial health and overall situation is integral and will provide you insight into the type of rates, options, and features you need to meet your financial goals.
2. Consider mortgage options outside of your bank
Approximately four to six months before you have to renew your mortgage, your bank will send you a letter. Most people typically accept this letter at face value and don’t consider renewal options outside of the bank. The good news is that you don’t necessarily need to accept this letter as your final proposal. Renewal time is a great opportunity to explore the other mortgage options and shop around different lenders.
3. Find a mortgage professional you can trust
When you get a mortgage at the bank, they are by no means obligated to give you the best offer. We recommend finding a mortgage advisor or professional who is unbiased and will shop around different lenders to find you the best option. At Homewise, we put our clients first and explore the marketplace for the best mortgage options and features available that align with your unique goals and financial situation.
4. Explore alternative or customized mortgage solutions
Renewal periods can be challenging, especially when interest rates are high. If you want to keep your home and avoid selling, working with an experienced mortgage professional opens doors to a range of options that aren’t easily accessible in Prime A institutions. If you’re a homeowner with a lower credit score, or higher levels of debt, an alternative mortgage solution may be exactly what you need to keep your home.
Mortgage renewals, especially in periods of high interest rates, can feel overwhelming. However, it can be a lot easier if you look beyond traditional financial institutions and find a mortgage advisor who puts your financial goals and needs first. At Homewise, we set out to help our clients find the best mortgage option, while providing meaningful market insight and advice along the way to ensure you’re always making an informed decision.
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