You may be thinking of a mortgage transfer or change because you want to take advantage of a better interest rate. Or perhaps you’d like to switch to a mortgage product with terms that better suit your needs. Either way, there are a few different scenarios you could find yourself in.
Up for renewal?
If you’re approaching renewal and are considering a mortgage transfer or switch – great news! You won’t be charged a penalty. However, depending on whether you make any changes, you may be required to re-qualify at the current rate.
Collateral charge mortgage?
Collateral charge mortgages secure your loan against collateral, such as the property. These loans cannot be switched, they can only be registered or discharged. This means that you would need to discharge the mortgage from your current lender before registering it with a new lender.
If it’s the middle of your term and you’re considering a mortgage transfer or switch, you will likely incur a penalty for breaking it. Typically, a mortgage transfer or switch is done to take advantage of a lower interest rate and lower monthly payments. But, you want to be confident that the penalty doesn’t outweigh the potential savings.
Things to consider before a mortgage transfer or switch:
- Associated fees
- Requalifying at current rates
- The following documents:
- Application and credit bureau
- Verification of income and employment
- Renewal or annual statement indicating mortgage number
- Pre-authorized payment form with VOID cheque
- Signed commitment
- Confirmation of fire insurance
- Confirmation of valid CMHC, Sagen or Canada Guaranty insurance (if required)
- Payout authorization form
- Property tax bill
If your mortgage is currently up for renewal or you’d like to make a change, please reach out to us. We can advise you of any penalties or fees that may be associated and shop the market for you to find the best options. Our extensive network of lenders will ensure that you are getting the best rate, with the most suitable terms. When you’re ready, simply fill out the form here to get the process started!