Mortgage renewals

VicChung · Mar 16, 2011

Hi,

I have a few 35 year and 40 years mortgages that are due for renewal in 2012. With the new 30 year amortization rule, will my existing 35 and 40 year mortgages be grandfathered and renewed on the existing terms or will I have to re-qualify under the 30 year amortization?

Thanks, Vic

Thomas Beyer · Mar 17, 2011

30 years AND 85% LTV for re-finance, although with CMHC the CMHC ticket is good for the life of the mortgage so the mortgage amount should not be a problem.

Banks love CMHC as it is no-risk ! Borrow at 1% and lend at 4% with no risk .. would you not do this with a few billion if you were a bank ?

Jeffersonn · Mar 17, 2011

For the renewal of mortgage is not a big issue and as far as the case in concerned you don't need to worry about. Just consult nay mortgage adviser in nay financial institution and tell him all the details. I am sure there will be a way out. Good luck

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mortgagemann · Mar 18, 2011

Vic,

A lot of people had the same question. Yes, you get to keep your 35 or 40 year amortization. However, if you refinance rather than just transfer your mortgage to a new lender, the 30 year maximum would apply.

Thomas Beyer · Mar 19, 2011

[quote user=mortgagemann]Yes, you get to keep your 35 or 40 year amortization.

are you sure ?

keep in mind that any mortgage renewal is usually at the posted rate which is 1.25% to 1.5% higher than market !

RobMacdonald · Mar 22, 2011

Hi Vic,

I'm assuming your are asking about residential mortgages. If you were originally qualified on a 35 or 40 year amortization, it is my understanding that lenders will not be reducing the amortization at renewal. As long as you are not making any material change to the mortgage, then the original amortization (less the time gone by) will apply.

In most cases lenders will offer you rates less than the market, but you can negotiate lower. If you transfer the mortgage to a new lender it is my understanding that they lender can honour the original amortization provided there is no material change to the mortgage.

VicChung · Mar 22, 2011

Thanks everyone and Rob. Rob, can you please clarify material change?

Thanks

RobMacdonald · Mar 23, 2011

Hi Vic,

Material change would be if you wanted to add additional funds to the mortgage, or change the borrowers etc. As long as you leave the original mortgage terms the way they are, you still have some 'bargaining' options.