Renewing a Mortgage

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At some point, the term of your mortgage will come to maturity and you will have to decide between renewing your mortgage with the same lender or refinancing with a different lender.

Prior to the maturity date, the lender will generally send you a notice advising you that you will be offered a renewal and setting out the various options, such as current open (can be paid out at any time without penalty) and closed (penalty for pre-payment, excluding any partial prepayment privileges, etc.) periods.

When your mortgage term expires, the full amount of the outstanding mortgage principal plus any accrued interest is due. If you are unable to fulfil the closing payments, there are various options available, including renewing your mortgage for a further term.

You have various options to consider at the end of the term. Here are some key strategies to consider while deciding what to do with your mortgage:

  • You have the option to reduce the principal by making a partial pre-payment, without a penalty.
  • Change the frequency of your payments. For example: weekly, bi-weekly, semi-monthly or monthly.
  • Change the interest calculation from a fixed rate to a variable rate mortgage.
  • Increase the amount of the mortgage. Many lenders will lend you an additional amount at renewal time, called an “add-on” mortgage, if you have increased equity (amount of home value after mortgage debt is deducted), and can afford the increased monthly payments. The additional funds could be used for renovating, paying off other debts, starting a business, travelling, or some other purpose.
  • Transfer the mortgage to another lender if the competitor’s package is more attractive. In practice, this means that one lender will advance funds to pay off and then discharge the other lender’s mortgage and replace it with its own, or conversely, arrange to assume the existing mortgage.

If you require financial services and consultation for matters concerning a mortgage loan, mortgage refinancing or renewal, Sky Financial has competent brokers who can be of assistance to you. For more information about our mortgage services, visit our website or call us at 1-800-472-9791.




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About Sky Financial

We incorporated The Mortgage Centre-Sky Financial Corp. in August 1992 in Edmonton Alberta. Furthermore we opened offices in Fort McMurray, Cold Lake, Grande Prairie, Red Deer, Stettler, Saskatoon, Moose Jaw and Prince George BC.

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