Your mortgage renewal is the one moment you can usually restructure without a prepayment penalty. That makes it an ideal time to consolidate debt.
Why renewal is the best time
- No prepayment penalty at the end of your term
- You can switch lenders to get the best rate on the larger amount
- Legal work happens anyway if you switch
See the costs of consolidating.
Plan four to six months ahead
- List your debts and decide which to include. See which debts.
- Estimate your equity. See equity needed.
- Clean up your credit: pay everything on time in the months before.
- Compare offers before signing your lender’s renewal letter.
If renewal is far away
A second mortgage now, then folding it into your first mortgage at renewal, can bridge the gap without breaking your current term. See which way to consolidate.
Don’t sign automatically
Renewal letters often come with less competitive rates. A broker can compare.
This article is general information, not financial or legal advice. Lender requirements, rates and fees change and depend on your situation.