Kevin Bell

Sunny ways

How Danny saved $25,000 on his mortgage renewal
In today’s volatile interest rate environment, I can’t overstate the importance of taking advantage of a full 120 day pre approval period.
At Direction Mortgage, we call all our existing clients at least 4 months ahead of renewal since we know that this will give us the greatest opportunity to lock in the best rates. We simply secure the best rate available and improve the rate if bond yield fall, and lower mortgages rates become available.
Why does you bank wait to send a renewal offer one month before your renewal? The banks have the information to help their clients save money offering renewals 4 months before maturity, but instead the banks deliberately choose not to help their clients. But why?
Simple.
For Canadian banks, waiting until 1 month before renewal is incredibly profitable strategy as this helps them segment their clients.
If you are waiting for a renewal offer, your bank knows that you are either (1) not price sensitive, so the rates you see do not reflect the best rates available or (2) unable to qualify at another institution.
By charging clients more on a renewal offer, the bank makes more money.
In addition, as we have seen consistently over the last 18 months, in a rising interest rate environment, rates can be lower to much lower 4 months ahead of your renewal than 1 month before your renewal.
For example, today's 5-year fixed rates are 0.5% higher than they were 3 months ago. Too bad some people are waiting to see what their bank will offer

Beyond ensuring the macro conditions are in place to reduce construction (including higher interest rates and slow building permit approval process), what additional steps could government take to create a housing crisis?
Record immigration levels? Anything else?

Direction Mortgage and I are grateful to have won the Toronto Star Readers Choice Award for best Mortgage Company / Service (again). I look forward to teaching more clients to make mortgage interest tax deductible going forward, in addition to getting the best rates and terms on mortgages. Thanks again.

Please vote for Direction Mortgage as Best Mortgage Company or Service in the Toronto Star Readers Choice Poll. Thanks again for the support.

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