Monthly mortgage payments are one of the biggest expenditures that the Canadian population has to bear. Many surveys point out that a great majority of loan holders make utmost efforts to give an early end to their mortgages. In this aspect, they also make additional payments.

When you buy a home, your mortgage company makes you sign an agreement. This agreement remains active for a certain period of time. When it eventually comes to an end, you have to decide to either pay back the entire loan or renew your mortgage for another term. It provides an opportunity to reconsider your mortgage requirements and to opt for mortgage options that best meet your current needs.

1. Complete your Homework: In case you already have a loan, look through your documents and research more about the services you presently have. Learn about your current interest rate, renewal period, and the penalty charges to end your mortgage. Being a first time home buyer, get a comprehensive idea of your net income, expenses, and debts so that your mortgage company can determine your affordability.

2. Choose the Best Type: At the time of mortgage renewal, make sure to choose the best kind of mortgage. Basically, mortgages are of three types including open, close, and convertible. The process of mortgage renewal gets much easier if you realize which one best fits your needs. While incorporating higher interest rates, an open mortgage can be paid off at any time. A closed mortgage involves lower interest rates and is more beneficial for long term ownership. If you want to employ variable interest rates, then you can opt for a convertible mortgage that initiates as an open mortgage but can be changed into a closed mortgage at later stages.

3. Choose another Lender: You do not necessarily have to renew your loan with the same mortgage company. Instead, you can move it to another company if they offer you better terms and conditions. Make sure to confirm different costs involved in changing a mortgage company including legal charges, administration charges, and fees to release the previous mortgage.

4. Maintain the Same Payment Amount: The monthly payment is often reduced at the time of mortgage renewal. If you continue paying the same reduced amount, you are likely to take years to completely pay off your loan.

5. Negotiate for Alternate Options: When you have to negotiate for mortgage renewal, make sure to not only focus on the interest rate. There are various other factors that need to be considered including paying back period, rate type, and flexible payment schedules.