Are you tired of overpaying on your mortgage? Imagine slashing your monthly payments and saving money in the long run! When your mortgage renewal period arrives, refinancing could be the key to unlocking those savings.
This blog reveals four ways refinancing can boost your financial health and explains how mortgage renewal presents better opportunities in the long term.
1. Lower interest rates
One of the most appealing benefits of refinancing is the potential to secure lower interest rates. For instance, if you are currently paying a 4% interest rate, refinancing can help you get 3% or even 2.5%. While this might not be considered much, it could reduce your monthly payment and save thousands over the life of your mortgage.
2. A shorter loan term
Refinancing also presents the opportunity to shorten your loan term, which also leads to substantial interest savings. Let’s say you subscribed to a 30-year term and your mortgage renewal window just opened up. Refinancing can enable you to switch to a lender that offers a shorter term, like 15 to 17 years.
While this usually results in higher monthly payments, the total interest paid over the loan term is slashed significantly, thus helping you build equity faster.
3. Eliminate private mortgage insurance
Private mortgage insurance (PMI) is a type of insurance that lenders in Ontario require from borrowers who have a down payment of less than 20% of the home’s purchase price. This protects the lender in case the borrower defaults.
However, once you have built up enough equity in your home, refinancing could allow you to remove PMI altogether. By refinancing, you can access a new loan based on your home’s current value, which may allow you to reach that 20% equity threshold and reduce your monthly payments.
4. Switch mortgage types
Refinancing can also provide homeowners with the chance to switch to a different mortgage type, such as moving from an adjustable-rate mortgage (ARM) to a fixed-rate mortgage.
This switch offers you stability in monthly payments. Fixed mortgages are structured to maintain the same interest rates throughout the loan term, which provides a layer of protection against interest hikes in the future.
Choose Northwood Mortgage and Enjoy Reduced Costs on Mortgages
If you are ready to take advantage of your mortgage renewal window and access reduced costs through refinancing, we are your best guide!
Being one of the most trusted and talked about brokers in Ontario, Northwood Mortgage provides the right knowledge and support when you are searching for refinancing options.
We evaluate your financial situation, the reasons behind your decision to refinance, and provide expert guidance on the Ontario house market. Additionally, you get access to a long list of reputable lenders, including credit unions and trusts, as well as their competitive rates and terms, ensuring you get the best one that suits your financial situation.
Let us help you cut down on mortgage costs today! For more information, call us at (416) 969-8130 or contact us online to make informed decisions about your mortgage renewal and maximize your savings.
