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Switching your mortgage to Meridian

Switching your mortgage to Meridian

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.

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.
man looking at tablet

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 will 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

Be mortgage free sooner

We call it 20/20 prepayment. Pay off up to 20% more of your mortgage each year through a combination of prepaying more of your original principal balance and increasing your original mortgage payment.

Questions? There are several ways to get in touch