Mortgage renewal - Maturity date in the middle of the month
Hi all, I am about to renew my mortgage with the current term coming to an end soon.
First time going through a renewal here, and have a couple of quick questions:
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Let's say my current term is at 2% with the maturity date of March 15, and the new one at 5% (same lender).
I believe mortgage payments are made in arrears (i.e. paying for March 1st-31st on April 1st) , as opposed to payments in advance like rents.
Will my next bill (April 1st) be prorated? (i.e. 2% for Mar 1-15, and 5% for Mar 16-31)
OR, will I be charged the new rate/amount for all of March regardless?
I thought it would be prorated, but based on what I am seeing on my accounts page, it seems like the new rate is being applied for the entire month (i.e. 5% for all of March, listed under "upcoming activities/payments"). Maybe it will be recalculated based on the proration? -
I understand that if the renewals are not processed in the system in time, it will be converted to an open mortgage by default (which could go well above 7-8%) until renewal.
If there is a delay in the renewal process for whatever reason (system delays, holidays, etc), I am guessing the 7-8% rate will be applied for the duration until the renewal is complete, right? regardless of when the process request has been made. (if rates/payments are prorated, as per my previous question)
Not really worrying about this yet but just wondering how it would work in general (and my mortgage advisor isn't being very responsive at times tbh lol, and my current term is coming to an end very shortly).
I did ask my mortgage advisor but he wasn't being very clear about these and told me he will get back to me. I'll probably follow up again soon but just wanted to know if anyone has had any similar experiences and what I should be expecting.
(I did find a couple of similar posts but they were all either for new move-ins or move-outs, and not for renewals within the same lender)
Thanks in advance!
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Posted Feb 24, 2024, 3:39 PM UTC