PaulMeredith wrote:
When your mortgage comes up for renewal, your bank sends you out a renewal agreement for you to sign to keep your mortgage with them. There is a large percentage of borrowers that will just sign the paperwork and return it to their bank without even thinking twice.
The bank knows this, so it is likely you won't the lowest market rate on your renewal statement if you are with one of the big banks. Often, they send it in at 'posted rates'. It is not uncommon for posted rates to be a full two percent higher than the banks discounted rates!
If you take a $300,000 mortgage amortized over 25 years and compare the banks posted 5 year fixed rate of 5.34% vs. today's lowest 5 year fixed rate of 3.25%, you get a difference of $31,696.89 at the end of the 5 year term! Can you say 'new car?'
You work hard enough for your money to just go and offer the bank a nice 'bonus' for essentially nothing. Just because you didn't shop around or so much as pick up the phone to ask them if they could do better. Just recently I had a client in the same situation where the bank was quoting them 1.5% higher than I was able to get them.... with the same bank!
When your mortgage comes up for renewal, make sure you take the time to find out if you are being offered a fair rate or if your bank is trying to gauge you. It can very often be the latter.
Sent you an email Paul.
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