Think beyond rates when you renew your mortgage

(NC) If you bought your home within the last five years, it may soon be time to dust off that mortgage document and consider your renewal options. Chances are, not only have mortgage rates changed, but so too have your circumstances since your last term.

“Too many Canadians focus solely on the mortgage rate when the real secret to saving money at renewal time is to consider term, amortization, and payment frequency,” says Erica Nielsen, vice-president of home equity financing at RBC Royal Bank. “Don't automatically renew or you may be missing out on ways to save on your overall mortgage costs. Review your financial goals as you choose your next mortgage.”

Homeowners often zero in on the interest rate of their mortgage as the top consideration when mortgage shopping, Nielsen points out. While interest rates have been at near or record lows for some time, be mindful that a future rate change may impact the budget for your home and lifestyle. Your comfort level with fluctuating interest rates may help you decide whether to renew your mortgage at a fixed or variable rate.

From RBC, here are three ways to help you save on interest rate costs and become mortgage-free faster:

1. Up your frequency: Most people think of a mortgage payment as a monthly expense. Consider switching it to a bi-weekly accelerated payment schedule. By making a mortgage payment every other week, you'll end up making one extra monthly payment every year.

2. Flexible payment options: Some mortgages offer a low rate, but contain lots of restrictive fine print. Secure a mortgage that offers both a great rate and flexibility, with features such as double-up payments, deferral options, and prepayment privileges.

3. Talk to a mortgage professional: Everyone's mortgage needs are unique. A mortgage specialist can provide expert advice and help you with customized payment strategies, rate inquiries, moving your mortgage, or setting up the appropriate amortization period and term to help you achieve your personal financial goals.

More information is available at www.rbcroyalbank.com/mortgages.

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