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SHOULD YOU SWITCH YOUR MORTGAGE?

When your mortgage comes up for renewal, you have a great opportunity to move to a different mortgage provider. The two main reasons people switch are better interest rates and better terms and conditions, like increased prepayment privileges so you can reduce your principal faster and pay less interest. 

 

Interested in switching to Meridian?


HOW DO I SWITCH MY MORTGAGE?

Once you decide on the mortgage you want, you need to submit an application. You’ll also need to provide:

  • A copy of the mortgage renewal letter from your current lender

  • Proof that your property taxes are paid and up to date

  • Confirmation of income, like a pay stub or letter from your employer

  • Proof of property insurance

After the new lender approves your mortgage, they request a payout statement from your old lender. This statement includes the outstanding mortgage amount as of your renewal date. The outstanding amount is now the mortgage amount with your new lender.

The last step in switching your mortgage is to pay any outstanding fees to your new lender. After that, your new lender will pay out your mortgage with the old lender, and issue you a new one.


QUICK TIPS

  • You can’t change your mortgage amount or amortization period when you switch providers. If you want to do that, talk to your new lender about refinancing.

  • Costs you incur from switching lenders (up to $3,000) can be added to your mortgage and amortized, rather than paid out in full.

  • If you switch providers before your mortgage term ends, you have to break your mortgage term and pay a prepayment penalty to your current lender.

  • Private and collateral mortgages are not eligible for switching.


IS SWITCHING WORTH IT?

It might not seem like much, but even switching to a mortgage with a slightly lower interest rate can make a big difference. Here’s an example of how it can all add up.

Say you have $400,000 to pay off. You can renew your existing fixed rate mortgage at 3.30% for a 5-year term or switch to a different provider with a fixed rate mortgage at 2.80% for a 5-year term. Let’s crunch some numbers.

3.30% for a 5-year term = $1,955.09 monthly payment
2.80% for a 5-year term = $1,852.17 monthly payment

That might not seem like a big enough difference to bother with switching your mortgage, but look at it over 5 years:

3.30% for a 5-year term = $61,152 in interest
2.80% for a 5-year term = $51,705 in interest

That’s a difference of $9,447!*


HOW MUCH DOES IT COST TO SWITCH MY MORTGAGE?

 

The exact amount will depend on the lender, but here are the types of fees you usually pay:

  • Appraisal fee to verify your property’s value

  • Assignment fee to transfer the mortgage from the old lender to the new lender

  • Discharge fee to discharge the old mortgage and register the new mortgage

  • Legal fees for your lawyer to sign the new mortgage agreement

Note: Lenders often offer to pay some or all of these fees when you switch your mortgage to them.


WHY YOU SHOULD SWITCH TO MERIDIAN

 

Great rates

Like 2.94% for a 5-year fixed-rate mortgage, and 2.90% for a 5-year variable rate mortgage.
 

20/20 prepayment privileges

Each year, you can pay up to 20% of the original principal or increase your payments by 20% without penalty. This can really help reduce your principal and the amount of interest you pay over your mortgage term.
 

Skip-a-payment

Skip one month’s mortgage payment to get some extra breathing room when the unexpected happens.
 

Flexible schedule

Get a payment schedule that fits your life and budget: weekly, bi-weekly, monthly, bi-monthly, or accelerated weekly or bi-weekly.
 

Mortgage protection

Our Group Mortgage Protection (GMP) helps safeguard your home in case of financial hardships like death, disability or critical illness.
 

Explore all Meridian mortgages


YOUR MORTGAGE. YOUR WAY.

Want to talk about switching to Meridian? Great! You can visit a branch, get in touch with us by phone, book a meeting with a mortgage specialist or go ahead and apply online for the mortgage you want.