The clock ticks down on your mortgage renewal, and suddenly, the deadline slips by unnoticed. What happens now? Is your financial stability at risk? Missing a mortgage renewal deadline can lead to unexpected consequences, but it is not as dire as it seems.
In this blog, we will discuss what really occurs if a deadline is missed, how your mortgage type influences the outcomes, and the options you can explore.
Understanding Mortgage Renewal: A Quick Overview
As your mortgage term ends, a new window opens, which is popularly known as mortgage renewal. However, what does this exactly mean?
A mortgage renewal is more than just signing additional paperwork; it is a chance to rethink your financial situation. This window enables you to renegotiate terms with your mortgage provider, adjust payment schedules to ensure they align with your income flow, or even switch lenders for more affordable offers.
The mortgage renewal process happens at the end of the term and can offer a fresh start, but only if you act on time.
Common Mortgage Types and Their Renewal Implications
Mortgages come in different forms, with two of the most common being fixed-rate and variable-rate.
- A fixed-rate mortgage offers stability, as your payments remain the same throughout the term, thus making it convenient to plan and budget.
- On the other hand, a variable-rate mortgage fluctuates with the market, presenting potential savings when prices are low, but also posing a high risk if rates rise.
When it comes to mortgage renewal, your experience will differ based on the type you subscribed to. With a fixed-rate mortgage, you can expect predictability during renewal, while a variable-rate mortgage may require you to pay close attention to market trends.
What happens if you miss your mortgage renewal?
Missing your mortgage renewal deadline can lead to some immediate, and often costly, consequences.
When the deadline passes, most lenders will automatically renew your mortgage, but at their posted standard rate, which is usually higher than your previous rate. This switch dramatically increases your monthly payments, and leaves you with less money for other expenses that may be a priority.
For instance, if you had a fixed-rate mortgage at 2.5% and missed the renewal date, your lender could move you to 5%, making your mortgages higher over time. For those with variable-rate mortgages, the consequences are even more unpredictable, as you could be required to pay higher rates based on market trends.
However, while the financial impact is real, missing a mortgage renewal window doesn’t mean losing your home.
Your Options After Missing a Mortgage Renewal Deadline
If you miss a mortgage renewal deadline, do not panic! There are steps you can take to minimize the impact, including the following:
- Contact your lender immediately: Discuss renegotiation options to see what can be done.
- Explore switching lenders: If your default mortgage lender rate is too high and renegotiations aren’t going too smoothly, consider looking for better offers elsewhere.
- Check for a grace period: Some lenders in Ontario may offer “grace periods” for a late mortgage renewal, though penalties could apply.
With Northwood Mortgage, You Never Miss a Renewal Deadline
In the hustle and bustle of life in Ontario, it can be easy to forget your mortgage renewal date amidst family responsibilities, work activities, and daily demands. Fortunately, it doesn’t have to be this way anymore.
At Northwood Mortgage, we provide a dedicated, proactive service that contacts you four months before your mortgage renewal date, ensuring you never miss it. Our mortgage agents take the stress out of the renewal process by managing negotiations to help you avoid higher payments or unfavourable terms.
If you decide to switch lenders, you will be glad to know that we also have access to over 50 lenders, alongside a detailed comparison of their rates and terms, to find the one that suits your unique financial needs.
Don’t leave your mortgage renewal to chance! You can call us at (416) 969-8130 or contact us online to create a personalized reminder, discuss your renewal options, and secure the best opportunities now.
