As 2026 approaches, many Canadian homeowners face the daunting task of mortgage renewal amidst fluctuating interest rates. Financial expert Christopher Liew outlines five practical strategies to soften the impact and secure better terms.
Start Early and Negotiate
Liew emphasizes the importance of beginning the renewal process months in advance. Lenders often provide early renewal offers, but these may not be the best rates. By initiating discussions early, homeowners have time to compare offers and negotiate more favorable terms.
Compare Multiple Lenders
Don't settle for your current lender's first offer. Shop around and obtain quotes from various banks, credit unions, and mortgage brokers. Even a slight difference in interest rates can lead to significant savings over the mortgage term.
Consider Shortening or Lengthening the Amortization
Adjusting the amortization period can impact monthly payments. Shortening it increases payments but reduces total interest paid, while lengthening it lowers payments but increases long-term costs. Choose based on your financial goals and cash flow.
Make Lump-Sum Payments
If possible, make lump-sum payments before renewal to reduce the principal balance. Many mortgages allow annual prepayments up to a certain percentage. This reduces the amount to be renewed and can lead to better terms.
Improve Your Credit Score
A higher credit score can unlock lower interest rates. Pay down debts, avoid late payments, and check your credit report for errors before applying for renewal. Even a small improvement can make a difference.
By implementing these strategies, homeowners can navigate mortgage renewal in 2026 with greater confidence and financial ease. Liew advises consulting a mortgage professional for personalized advice.
