Renewals account for 53% of all residential mortgage business in Canada. Yet 70% of mortgage holders simply sign and return their lender’s renewal form. Bad, bad, bad!
Using a mortgage planner for renewals makes more sense. That’s because interest rates in lenders’ renewal offers are almost always higher than a mortgage planner can find you elsewhere. You’ll often get better privileges with a different lender as well.
But why are renewal offers so bad? The Nanaimo Bulletin says it’s because “human nature is to embrace convenience and the lenders count on it.”
Switching lenders is nothing to fear though. In fact, it’s often very inexpensive. You usually have to pay your current lender’s discharge fee of $250-$300; but, if you save a ton of interest and get better perks–who cares?
One last note. This story applies especially to the big banks. In the case of non-bank lenders, a few of them actually offer pretty decent renewal rates.