As the amortization period may consist of several mortgage terms, you would be required to renew your mortgage at the end of each term. In Canada, if you have acquired the mortgage from a federal regulation financial institution, you must be provided with a renewal statement at least 21 days prior to the expiry of term.
Negotiating with Lenders
The borrowers are strongly advised to contact their lender at the end of their mortgage term and negotiate the key aspects of mortgage like premium rate, amortization, payment frequency and terms of agreement. Almost every lender tries to retain its customer by even offering discounts, only if the borrower has shown his credit worthiness in the previous term. A good negotiation may fetch you the best interest rate and conditions for the new mortgage term.
Borrowers are not necessarily required to continue the mortgage with the same lender, as in previous term. In fact, it is sometimes advantageous to evaluate the alternative products and services from different lenders. If another lender offers terms of services best suitable to your needs, you can easily switch by renewing your mortgage with the new lender. However, switching your lender might have certain extra costs.
Refinancing your Mortgage
As the expiry of a mortgage term approaches, it is a good time to refinance your mortgage. The interest rates and terms of agreement will certainly be reconsidered and reformulated, if necessary. You can consolidate your debt by adding your credit card payments, auto loan payments and student loan payments to your mortgage for a lower interest expense. Moreover, you can take some equity for the purpose of investing, buying second property or for renovations by refinancing at the end of mortgage term.
If you are able to figure out the best deal for yourself, take the consultancy services of a professional mortgage broker who has access to diverse products and services from multiple lenders and can negotiate on your behalf.