Switching Your Mortgage

The mortgage market in Canada is extremely competitive.  When mortgages are up for renewal, borrowers often explore their lending options. 

Most lenders will require a wide range of information to switch a mortgage from one financial institution to another.  Lenders will want to see a copy of the renewal offer from the existing mortgage provider and want verification of land ownership (recent property tax bill).  Although the mortgage market is competitive for your business, lenders still want to limit their lending risk.  Borrowers require confirmation of income, including   copies of recent pay stubs or an employment and income confirmation letter.  Proof of property and fire insurance is also required.

Switching, refinancing and renewing is not automatic.  Lenders will want to ensure borrowers are still qualified, and if they desire to change the existing terms or conditions of their mortgages. 

If a mortgage is maturing or up for renewal, and individuals are not looking to increase the funds borrowed, or change the amortization period or loan-to-value ratios, a simple renewal with your existing lender is an easy process.  Approximately 75% of mortgages are renewed with their existing lenders. 

Borrowers who want to switch lenders do so for a variety of reasons.  Most commonly, borrowers switch mortgages because a better mortgage rate is being offered.  When borrowers try to increase the amount borrowed, or lengthen their amortization period, this is when additional qualification requests from lenders start occurring.  It is easier to renew an existing mortgage with the existing lender instead of switching a mortgage to another one whereby additional funds may be required.

Only an existing lender is able to renew a mortgage without re-qualifying the borrower. 

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April 27, 2017

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