Mortgage Renewal

Crab apple in bloomAbout four years ago I was getting evicted out of my apartment because the dog howled all day, so Ryder and I bought a tiny house near the dog park.  A lot of things happened in four years: I fell in love with Shauna, she moved in, a tree fell on our house, she gave birth in our living room, the dog park was closed.

And after four years, it’s time to renew the mortgage.

Even though it’s been only four years, a lot has changed since I first took out a mortgage:

  1. Four years ago it was hard to know if you were getting a decent rate — all banks had posted rates that meant nothing.  You needed a broker to help navigate the process. Since then, it became increasingly easier to find competitive rates online.  There are now rate sites like ratespy and ratehub that publish competitive actual rates.  There are even online brokers that are priced extremely aggressively.
  2. Bond yields (which drive fix-rate mortgages) continued to plunge, and borrowing got a lot cheaper.  Some day soon, the bank is going to pay you to take out money:
    5 Year Bond Yields
  3. Houses continued to get more expensive. I felt houses were ridiculously priced four years ago — now I just I don’t know who can afford these things.

But some things haven’t changed:

  1. Big Canadian banks continue to be better at marketing than at offering decent products to their customers.  I don’t understand why people continue to use big banks for anything.  In the case or mortgages, working with a mortgage broker is still the best option.
  2. Negotiating the mortgage renewal papers is still worth it.  Once we got more competitive quotes, our current lender quickly improved their offer as well.
  3. Looking at financing options early is still a good idea.  Contractually, lenders are only obligated to send a renewal offer 21 days in advance.  This hardly offers enough time to sort out all the paperwork needed to move to a new lender.  We started looking about 90 days early and called our lender to see what they offered when we had some good options.

Unless rates plunge further this spring as our petro-economy collapses, our renewal paperwork is all set.  Which is great news for our marriage as for the past few weeks Shauna has been forced to endure an endless whirlwind of spreadsheets, amortization schedules, and rate tables.

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