Question:

I have to renew my morgtage but I will be selling my house within the next 6 months, which is the best term and rate I should be looking at.

Answer:

A very simple question can have a complicated answer. This happens to be one of those cases. If you believe rates are going up (and many people do) and you plan to purchase a larger more expensive home, it may make sense to take a long term mortgage at say 5% for five years and later use the lower rate (5%) to blend with the increased mortgage. This will have the effect of lowereing your overall rate on the new mortgage. If you are downsizing and/or will not need a mortgage in future you may choose to go to an open mortgage on renewal for 6 mos to 1 yr term depending on the lower rate. Alternatively, if your lender offers secured credit line mortgages at prime (3.75% today) you may choose to convert to that if your loan to value ratio is 75% or less. If you don't have much mortgage left, you may just choose a 6 month mortgage term on renewal. That will likely be a low rate anyway and the penalty to pay it out early shouldn't be that severe.These are very general answers to your question. For a more specific answer, I would need to know who your mortgage lender is, the amount of your mortgage and what your future intentions are with respect to owning a home. As a mortgage broker, we deal with dozens of institutional lenders who offer many different mortgage products and some of the lowest interest rates on the planet. It is a matter of finding the right mortgage for you, not the flavour of the month offered by your bank. John Lozinski

Answered By: John Lozinski

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