Your current lender might have a vested interest in locking you into a five-year mortgage rate. But why is that?

Well, here’s the scoop: lenders stand to make the best return on their investment when you renew your mortgage with them for another five years. It’s not just about providing you with competitive rates – it’s about securing their own bottom line.

By enticing you with the five-year rate, your current lender is essentially banking on the fact that you’ll stick around for another term. And why wouldn’t you? It’s familiar, it’s convenient, and it’s the path of least resistance.

But here’s the thing: familiarity shouldn’t be the only factor driving your decision. While your current lender may offer competitive rates, it’s essential to explore all your options before making a commitment.

One crucial aspect often overlooked by lenders is your affordability. Before making any decisions, it’s crucial for homeowners to create a comprehensive budget. A budget allows individuals to understand how the offers from their lender will affect their personal finances. For instance, a bank may not be aware if you recently purchased an expensive vehicle, have a child heading off to university, or are planning to take time off work for family planning or medical reasons. By building a budget, homeowners can identify their financial priorities and obligations, enabling them to make informed decisions that align with their current and future needs. 

Shopping around and comparing offers from different lenders can give you a clearer picture of what’s available in the market. You might be surprised to find that another lender is willing to offer you a better deal – one that meets your needs and saves you money in the long run.

So, before you automatically sign on the dotted line with your current lender, take a step back and consider your options. Don’t let familiarity cloud your judgment. After all, when it comes to your financial future, it pays to explore all possibilities.