Mortgage Renewal Trap: How to Avoid Losing Thousands

If you're one of the millions of Canadians set to renew their mortgages this year, be aware that signing on the dotted line too quickly could cost you thousands. According to Christopher Liew, a CFP and former financial advisor, many people miss out on potential savings by not taking the time to review their renewal terms.

Liew notes that lenders often use the 21-day notice period as an opportunity to lock in new rates or push customers into less favorable products. To avoid this, he recommends starting the renewal process 120 days before your maturity date and treating the initial letter as an opening offer rather than a binding agreement.

Liew also emphasizes the importance of being prepared for negotiations by having all necessary documents ready, including recent pay stubs and proof of income. This can give you leverage to negotiate better rates or terms with your lender.

The Bank of Canada's decision to hold its policy rate at 2.25% in July has also been a blow to those hoping for lower interest rates, making it even more crucial to be informed and prepared when renewing your mortgage.