Read Your Mortgage Renewal Offer

Tracy Head • April 20, 2023

Twice over the last week I’ve had conversations with clients regarding their mortgage renewal offers that have really concerned me.


If you are new to the mortgage world, when you first get a mortgage you choose a term of anywhere from 6 months to ten years. Your interest rate (if fixed) is locked in for this period of time. At the end of whichever term you chose, your mortgage is up for renewal. You can choose to stay with your same lender or look for another lender.


As a rule, when I am working with my clients leading up to their renewal date I research to see what is available for them in terms of options. If they are planning to renew their mortgage without making any changes the first place I check is their current lender. Signing a renewal offer is pretty straightforward. You consider the options presented by your current lender, select your preferred choice, and sign on the dotted line.


If clients are planning on going this route I offer guidance and support to try to get them the best rate possible with their current lender. Unless there is a dramatically better offer with another lender this is the path of least resistance for you. For my own clients, I selected their original lender for a combination of reasons so it often makes sense for them to stay put.


If clients are wanting to pull equity from their home or add a credit line to their current mortgage then we look a little further afield. The two conversations that concerned me this week were with clients planning to stay the course with their current lender. Both clients were with the same lender.


Their renewal offers arrived with the rate of 6.14 per cent for a five-year term. In one case the clients had an insured mortgage, and in the other the client owed less than fifty per cent of the value of his home.


For perspective, most lenders are offering around 4.64 per cent for insured mortgages right now. Several lenders, including the one both of these clients are with, are offering the same rate for clients who have more than 35 per cent equity in their homes. After several back and forth requests with the lender, both of these clients signed their renewals at 4.64 per cent.


For the larger of these two mortgages, the interest difference between the two rates amounted to a savings of $26,673 over the next five years. Better yet, the difference in the monthly payment was $328.94. With costs soaring across the board $328.94 a month goes a long ways towards covering other expenses.


What was particularly concerning for me was a comment from one of these clients. She said “If you hadn’t reached out to help us with our renewal we would have just signed off thinking that was the best rate they would offer us”. I cannot stress enough how important it is to connect with a mortgage professional to look into your mortgage renewal options. Have your mortgage balance at renewal available, as well as the value of your home. It is also important to know if your mortgage is insured (when you purchased you had less than 20 per cent down payment).



Having this information handy when you reach out to your mortgage professional will help them narrow

down the best options for you.

Tracy Head

Mortgage Broker

GET STARTED

Is this the right time to buy a home?

By Tracy Head • October 4, 2025
Is this the right time to buy a home? Who has your best interests at heart? Buying a home can be either an incredibly exciting experience or a very stressful time. Or it can be a combination of both. Part of the challenge can be committing to the decision to move forward with buying a home. How do you know if you are ready? How do you know if this is the right time to buy? I love working with first-time home buyers. I particularly love when they reach out well ahead of time to do their research and get their ducks in a row. I have been working with one such young lady. She has been watching for the right home to pop up. She fell in love with one of the listings that she viewed and moved forward with an offer. She reached out to her investment advisor to make arrangements to move the funds she needed for her deposit from her investments to her bank account. Oddly he did not reply to her three phone calls nor multiple emails. She was forced to walk into his office to deal with this. When she got there he essentially told her she was foolish for buying a home. She should leave her funds in her investments and continue to save with him. She agonized for a few days and ultimately collapsed her offer. He told her that this house, over the long run, was going to cost her $1,000,000. The purchase price was $650,000. The total of the purchase price plus interest over the long run seemed like an astronomical sum. He persuaded her that she would be better off continuing to rent and that at the end of the same time period she would have over $1,000,000 in her investment account. That’s all well and good in theory. In the meantime she still needs a place to live. And there are no guarantees as to what investments will do over time, nor what property values will do. I did some math to see what this actually looked like long term. We have to make some assumptions that the financial advisor is good at what he does and that her investments will do well over the long term. As a rule real estate appreciates over time and rent increases over time. That being said, here is the math I did. Making some assumptions that the mortgage rate stays the same and your rent never increases: $2400 rent per month x 360 months (30 years) = $864,000 $2833 per month mortgage payment x 360 months = 1,019,880 (monthly payments / I suggest you go bi-weekly to pay off quicker) At the end of 30 years renting you have nothing to show for the $864,000 you’ve paid out. At the end of 30 years paying your mortgage you will have a home free and clear – normally real estate increases in value over time so in theory it will be worth way more than what you’ve paid. If you wait another year to buy $2400 x 12 = $28,800 towards someone else’s mortgage. Here’s the wild card. If you choose to rent and choose to invest in a portfolio instead of buying, even if your portfolio is worth $1,000,000 at the end of the same time frame you need to subtract the $864,000 you paid in rent. This leaves you with a net gain of $136,000. If you had purchased a home, your payments of $1,019,880 would be offset by the value of the home you purchased. In this case, assuming no change in value, you now have a home worth $650,000 paid off. The wild card to run these comparisons is how much you need to invest monthly to accumulate the $1,000,000. Either way, you are making this payment on top of your rent payment. Another wild card of course is what property values and investment portfolios do over time. We know rent will continue to increase and mortgage rates will change but I think it warrants looking at this from another perspective. I am not a proponent of aggressive scare tactics so was disappointed in how this advisor handled his conversation with her.  Some people are more cautious with their financial plans and I appreciate that. Being certain about your long-term goals will help you navigate the path forward that suits your own situation. Make sure you have trusted people in your corner as you make these big life decisions.

Reverse Mortgage Solutions

By Tracy Head • September 22, 2025
For every problem there’s a solution. Sometimes more than one. It seems like there is an ebb and flow in the types of mortgage products clients choose. Over the last few years I have definitely been fielding more inquiries about reverse mortgages. Although they are becoming more widely accepted, reverse mortgages had a lot of bad publicity. The negative press I’ve seen relates to the American housing market where predatory lenders were taking advantage of vulnerable seniors. Reverse mortgages in Canada are highly regulated so that this does not happen. For some clients it takes a while for them to wrap their heads around reverse mortgages as an (or the best) option for them. Particularly in the Okanagan we see many clients who are house-rich but cash poor. Or at least have limited income to cover their day-to-day living expenses. Sometimes even when the clients recognize that a reverse mortgage is the right plan for them their families or children have objections. When I am working with clients and we are looking at a reverse mortgage as an option I always invite them to include their families / children to our conversations. Often clients are too embarrassed to share with their children exactly how dire their finances are. Sometimes clients can’t get past the stigma of refinancing via a reverse mortgage because all their lives they have worked hard to make sure their mortgage is paid off. Cliché as it sounds, times have changed. The cost of living has risen far quicker than increases to pension income. A friend of mine shared a conversation he had with reverse mortgage clients and their children. The children were vocally opposed to their parents moving forward with a reverse mortgage. Paraphrasing a bit but it went like this: “The way I see it” he said “after completing a thorough review of your parents’ finances, we have three options. Downsizing isn’t an option as they are already in a condo. Number one, they carry on with the current mortgage that they can’t afford. Their expenses come to about $2,000 per month so you can each transfer them $1,000 per month to help cover their payments. Number two, your parents can sell and move in with one or the other of you. Third, we take a closer look at a reverse mortgage to see if that helps them stay in their home without any financial help from you.” Apparently there was a very long pause. After a more thorough conversation about the pros and cons of a reverse mortgage and answering more questions the family did indeed feel a reverse mortgage was the best option for their parents. If you (or your parents) are thinking about a reverse mortgage make sure you take your time and ask all the questions you need to so you are confident moving forward.  I have seen reverse mortgages have a profound impact on quality of life for many of my clients. I did not used to be a huge fan of reverse mortgages but have to say I am using them more often to help clients enjoy their retirement years without losing sleep trying to figure out how to cover their expenses.