Are things different?
To properly renegotiate your mortgage loan, you must first measure what has changed since the last time it expired, explains Enrik Brassard, assistant vice-president, residential financing, at the National Bank. Especially if it’s been five years. The family may have grown, we may have changed jobs, and financial gains or losses may have changed the situation. “The answer to these questions will allow you to see if the term and conditions of your mortgage are well aligned with your needs, or if they should be changed,” he says.
A scenario of rate increases or rate cuts
To be well prepared to negotiate the new term of the loan, it is necessary to establish a scenario of the evolution of interest rates, suggests Enrik Brassard. “What will be the impact for you if rates go up or down, and how do you prepare for it?” “, he asks. One way to prepare for a possible rate hike is to give yourself a systematic savings plan that will offset the costs when faced with this eventuality.
See beyond the rate
It can be tempting to jump on the lowest interest rate you are offered. But it is important to also consider a few other factors that would help you in your financial management, says Nicolas Fréchette, director, management of financing products, at Desjardins. For example, a significant portion of the mortgage loan market is offered by financial institutions that also offer other financial services that may be of interest to you. You can then prepare to negotiate not only the rate of your mortgage loan, but also the costs relating to the overall offer of financial services that you use.
Have the goals changed?
It will be all the more important to be well prepared to renegotiate your mortgage if the objective you had at the start has changed. For example, your original intention when you took out your loan may have been to make it a long-term investment. But for various reasons, your purpose may have changed and you expect to resell the property fairly quickly. Tell your lender about it, because it will probably be necessary to modify certain loan clauses to your advantage.
Enjoy equity in your property
Among the borrowers who may need to modify the structure of their mortgage financing, there are those who want to take advantage of their property to finance their retirement project. “Prepare to negotiate the thing if this eventuality concerns you”, suggests Nicolas Fréchette. It’s not just the reverse mortgage, which is generally a very expensive product, according to him. Instead, you could use a home equity line of 20-30% of the equity value of your property paying interest only. One thing is certain, the message is clear: be ready to negotiate.