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What to Watch Out For When Renewing Your Mortgage

It continues to amaze me when it comes down to renewing your mortgage, to observe how often banks try to burden their customers with a very high-interest rate, hoping that people will agree to their higher than market rate without looking at rates against other lenders. It seems that they have more types of customers than you ever imagined.

Maybe you've experienced this strategy of banks firsthand. The bank will send you an email to renew you a five-year fixed-rate mortgage for 5.49 percent. You visit their website to discover that they are offering 4.39 percent for the identical mortgage as a teaser to draw in new customers. It's a joke! You may have the advantage of renewing your mortgage with the help of many websites.

How Mortgage Interest Is Calculated?

It appears that banks do not appear to be interested in giving their customers the most beneficial option for them. It appears that they do not feel any obligation to show their customers loyalty with an appropriate offer. It would be reasonable to assume that banks would be aware that it's cheaper to keep a customer than to find an entirely new one, and that this would motivate them to care for the needs of their current customer base.

It seems that they'd rather offer high-end interest rates to existing customers, and then try to woo those who have fallen asleep in the dark. This is a huge blunder to me, and is not a good way to conduct business. In the near future, the client will discover that they were trapped with a very high rate and I am not sure that they'll look ahead to working with this bank in the near future.

The next time you're in the situation for a mortgage renewal, and you are presented with one of these rates, contact your bank and keep their feet up to the flame. Don't listen to the explanations they provide about their standard rates etc. and call them out on their scam.

If you do choose to request an estimate from them, ensure that they are aware that they're only given only one chance to provide you with an estimate, and that they should give you the most competitive rate and terms they can provide, without any shady tactics.