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You know what our number one pet peeve is at nesto? Seeing people lose out on saving thousands of dollars. After all, this is our brand’s goal, our reason for existence: helping you save money.
So, when we learned that 80% of Canadians are sticking to their primary bank during renewal season causing them to lose thousands in potential savings…yeah, we knew it was time to change all that.
That’s why in today’s quick take, we’re going to walk you through why most people (like you!) aren’t shopping around for their renewal rate and tips to change that so you can save thousands so you can see firsthand how simple it is to make the move (and make your wallet happy!).
The nesto Quick Take
If you’re like 91% of Candians, you likely read reviews and look at prices before shopping; however, when it comes to a more long-term decision, like mortgage renewal, do you do the same? Considering only 14% of Canadians are switching mortgage lenders, likely not.
Know you’re not alone, though. We even see this internally, as the number of nesto users seeking to switch their mortgage remains steady year over year – there’s no increase, no decrease. It’s the same.
So, why then, don’t people switch lenders when they can save thousands?
Well, a magnitude of reasons, really, from the likely suspects of being short on time to fear (which is one thing we will never be down with at nesto).
Let’s go through those reasons now and bring clarity to the otherwise obscure process of renewals:
- Lenders make the most profit off renewals, because no one negotiates it. Those who do negotiate renewal rates, don’t do their homework, so they think they’re getting a great deal but they are really just getting a small discount from a bad deal already offered.
- Most people don’t know that it is 100% free to change lenders at renewal time. Mortgage specialists will often claim fees / expenses / disadvantages from changing lenders – this is false in most cases.
- All companies, but specifically mortgage companies, will offer best foot forward to try and gain a new customer. Somehow in 2022, Canada’s largest companies still treat new customers way better than existing customers.
- Rates are currently increasing at a pace that is similar to the introduction of when Covid first crippled our ability to predict the future/market.
- Since that time, it hasn’t been more critical to discuss interest rates or soon to be mortgage holders or mortgage holders – if you take the laid back approach, put it on the backburner, you will spend more than people securing renewal with a new lender today. We are talking about thousands of dollars.
What are the benefits of switching lenders?
Monetary savings that reduce your monthly payment. Plain and simple.
A majority of Canadians have spent their life with one banking institution, and the result is getting shortchanged.
There is a financial tech revolution underway, redefining what value means to canadians. Whether you switch or not, doing homework will expose this value to you.
For instance, by working with nesto, 15% of our users renew their mortgage with us, and when they do, they are given the chance to change their mortgage rate. 3% of those who renew are able to get the best low variable or fixed rate saving them big money on monthly payments. What’s more, we make sure to remind them of renewal time/their best rates, and the average user secures 4 months out from their renewal date — just one way nesto advisors are on your side.
Actionable tips to finally switch lenders:
+ Get organized with your finances. This means reviewing your credit score to know exactly what your number looks like and how to improve. Lenders will want to know what your overall financial situation is starting with this metric, your credit score.
+ Shop around. Start comparing rates early and shopping around with multiple mortgage lenders. If you know that your mortgage renewal is within a given year, the earlier you start, the better.
+ Ask for a better rate. Yep, it’s really that easy. Don’t settle. Push for a better rate. What you’re being marketed with your primary lender isn’t the best rate they can do. (If you want transparency and trust in this process, talk to nesto mortgage experts. We’re low from the get go. No negotiation needed.)
Renewal resources to consider:
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