Meet Conrad and Susan: Is the lowest rate the best rate?
What Conrad and Susan Wanted – renew with the lowest rate
Conrad and Susan are a husband and wife team with two small children. Susan stays home with the kids, Conrad works in the trades. Life was in a good place, spending was under control, credit was excellent.
They were up for renewal and their lender came back with a higher rate than what the market had been showing. Instead of signing the renewal and moving on, they reached out to ask whether there were better options.
What We Discovered
Their existing lender was not willing to adjust the offer to something that matched their profile. That happens more often than people expect at renewal, even for borrowers with strong credit and a clean payment history.
We also needed to look at more than the headline rate. A lower rate can come with a contract that is restrictive, and those restrictions can matter more than people realize when life changes, or when the goal is to pay the mortgage down faster.
What Conrad and Susan Chose
We moved them through an insurable transfer, meaning we transferred their mortgage to a new lender at a much lower rate. The change saved them a little over 1.0 percent, about 1.1 percent, on the mortgage rate.
The transfer was completed at no cost to Conrad and Susan, and the new mortgage was in place in about three weeks.
What It Gave Them
A key part of transfers is that the remaining amortization follows you. If 15 years are left, the new mortgage is based on the same 15 years, and the payment is built around that. Even with a lower rate, the payment can feel more of a pinch than a longer amortization would, because more principal is being paid down on a shorter schedule.
There may be options to extend amortization in some scenarios, but not with every lender or at every rate. The bigger point is that you are not stuck with the lender you are with, and you are not required to accept a renewal offer that does not make sense.
The lowest rate is not always the best rate. Contract terms matter, prepayment options, accelerated bi-weekly payments, payment increase privileges, and avoiding clauses that leave “sale of the home” as the only clean exit. A good mortgage needs a good rate and a contract that keeps life nimble when something changes.
Takeaway
If a renewal offer feels higher than expected, pause and review options before signing. Rate matters, and contract terms matter, and the right move is the one that fits your goals.
Names have been changed for client privacy.
