Simplifying Your Next Mortgage Renewal!
Exciting News for Homeowners: Simplifying Your Mortgage Renewal!
I have some fantastic news that could make renewing your mortgage not only easier but also more cost-effective!
Starting November 21, the Office of the Superintendent of Financial Institutions (OSFI) is introducing changes to mortgage rules that could significantly benefit homeowners looking to switch lenders at renewal. This new policy opens up exciting opportunities for you to secure better mortgage rates and keep more money in your pocket.
What’s Changing?
Previously, if you had an uninsured mortgage (meaning you put down 20% or more), you were required to pass the federal mortgage stress test when switching lenders at renewal. This meant demonstrating that you could afford payments at a rate two percentage points higher than your current mortgage rate. For example, with rates currently in the mid-4% range, this stress test made it harder to qualify for better options with different lenders.
Banks have known that the stress test made it costly and complicated for you to switch, so they didn’t always offer the best rates. But now, starting in November, you won’t have to pass this stress test when making a straight switch to a new lender. This is a huge win for you! As OSFI Superintendent Peter Routledge stated, “There isn’t reckless underwriting in straight switches.” You can now shop around for better rates without the added pressure of the stress test.
Why This Matters for You:
More Freedom: You can switch lenders without having to re-qualify, giving you greater flexibility to find the best deal when your term ends.
Potential Savings: With increased options to explore, you could lock in lower rates, potentially saving you thousands over the life of your mortgage.
Fair Treatment: Uninsured mortgage holders will now have the same advantages as those with insured mortgages—no more unnecessary stress test hurdles!
What’s Happening with Rates Right Now?
The good news doesn’t stop there! Current mortgage rates are hovering in the mid-4% range, making it an excellent time to explore your options.
Additionally, variable rates have begun to decrease significantly, outperforming fixed rates as the Bank of Canada has made three consecutive rate cuts. With speculation of further reductions—potentially at least 0.50%—at upcoming meetings on October 23, December 11, and January 2025, the outlook for variable rates looks promising.
Just last week, the U.S. made its first significant rate cut of 0.50%, which may influence the Bank of Canada to adopt a more aggressive stance in its future meetings.
What Should You Do Next?
If your mortgage is approaching renewal or if you’d like to reassess your current mortgage in light of these changes, now is the perfect time to start exploring your options.
With OSFI’s new rules, you’ll enjoy increased flexibility to switch lenders and secure a better rate while capitalizing on current and anticipated rate cuts.
Let’s connect to discuss how these changes can specifically benefit you. I’m here to guide you through the renewal process!
Feel free to reach out anytime, and let’s schedule a quick call!
