How to find the opportunities already in your book.
Every funded mortgage you have is either fine or it is a conversation. This is the method for telling the two apart, in order, using data you already hold.
Get the book into one list
You cannot check what you cannot see. Before anything else, every funded mortgage belongs in one place, one row per client, with these columns.
- Client name, email and phone.
- Lender who holds the mortgage today.
- Balance what is owed now, not the original loan amount.
- Rate and whether it is fixed or variable.
- Term the length the client signed for.
- Maturity date when the term ends.
- Funding date when the mortgage closed.
A CRM export is the fastest source. A spreadsheet works. What matters is that the balance is a current balance and the maturity date is right, because everything downstream is priced off those two. If all you have is the original amount and the funding date, walk the balance forward before you use it.
Build this once and keep it current. A list that is a year old will send you at the wrong clients with the wrong numbers, which costs more credibility than saying nothing.
The five signals
- 1. A rate above today's market by enough to beat the penaltyA gap on its own is not an opportunity. The interest saved over what is left of the term has to cover the penalty and the cost of the switch before there is anything to talk about. Sort by the gap, then test the ones at the top.
- 2. A penalty about to step upInterest rate differential penalties are priced against the time left in the term, and lenders round that time to a rate band. When a client crosses from one band into the next, the comparison rate changes and the penalty can move sharply in either direction. The weeks before that step are worth knowing about.
- 3. Maturity inside 120 daysThe renewal offer is on its way, or already in the client's inbox. Most brokers work this one already. The point is to work it from a list that is current rather than from memory.
- 4. The one year mark, and every anniversary after itNot a rate conversation. A reason to be in the inbox with something useful, which is how the next rate conversation gets to happen at all.
- 5. A variable rate client on the day the Bank of Canada movesTheir payment or their amortization just changed and they know it. Every variable client in the book is expecting to hear from somebody that week.
How to price a switch honestly
- The penaltyPriced the way that lender prices it, not with a rule of thumb. Most fixed rate mortgages at a big bank use the greater of three months interest or the interest rate differential. A variable rate mortgage is three months interest. Monoline lenders build the differential differently from one another, and a few price a flat or declining percentage of the balance instead. On a term longer than five years the penalty is capped at three months interest once five years have passed.
- Interest saved over the remaining termNot over a fresh five years. Comparing the rest of the current term against the new rate over the same months is the honest comparison, and it is the one that survives a second look from the client.
- Break evenHow many months of savings it takes to pay the penalty back. Under a year is easy to explain. Past the end of the remaining term is not an opportunity, however good the monthly number looks.
- The monthly differenceThe number the client repeats to their spouse. Worth calculating even when the real case is built on total interest.
Two details that change the answer. Canadian fixed rate mortgages compound semi annually, so the effective monthly rate is (1 + annual / 2) to the power of 1/6, minus 1. Dividing the annual rate by twelve overstates the savings slightly on every file. And if the client has to qualify again, the stress test applies: they qualify at the greater of their contract rate plus 2% or 5.25%.
Before you price a break, check whether the client needs one. Most lenders allow a lump sum prepayment of ten to twenty per cent of the original balance each year without penalty, and sometimes that solves the problem without breaking anything.
What to send, and when
The first email is not a pitch. It is the client's own numbers, laid out plainly, with one clear next step. Their balance, their rate, what today's rate does to their payment, what leaving would cost, and how long it takes to earn that back.
Send it in your own voice. A client who has heard from you twice a year for four years reads a note from you differently than they read a template. Write the way you talk. Short sentences. Nothing they have to decode.
Timing beats volume. One email at the right moment does more than a quarterly send to the whole book, and it costs you far less when the answer is no.
Do it every day, not once a year
An annual pass over the book catches renewals and very little else. Balances, rates and penalties all move continuously, so the signals worth the most, a rate gap that just opened wide enough or a penalty band about to change, are exactly the ones an annual pass cannot see.
Daily is not more work once the checking is not done by hand. It is the same list read fresh, with the handful of clients whose situation actually changed today sitting at the top of it.
How RateGuard Pro does this
This page is the method RateGuardPro runs. Your book loads from your CRM or from a spreadsheet, so step one is done for you. Every funded mortgage is then checked daily against current rates and against its own penalty, priced by that lender's method, today and a few months ahead.
The clients worth calling come back ranked with the reason attached, and the first email is drafted from that client's real numbers in your name and voice. You read it, change what you want, and send it. Nothing goes out without you.
Jeff Mudrick built the first version for his own book, in a Google Sheet, because the manual version stopped scaling. RateGuard Pro is that work, done for every client, every day.
Common questions
How do I find refinance opportunities in my mortgage book?
Compare each client's current rate against what that client could get today, price the penalty the way their lender prices it, and check whether the interest saved over the rest of the term covers the penalty with room left over. Running that test across the whole book, rather than on the few files you happen to remember, is the job.
What data do I need to analyze my client book?
Per client: lender, current balance, interest rate, whether the rate is fixed or variable, term, maturity date and funding date, plus a name and an email to reach them. That is enough to price a penalty and build a comparison.
How far ahead should I contact a client about renewal?
Around 120 days out is the window most brokers work, because that is roughly when lender renewal offers start arriving. Earlier is fine when there is a reason. Later means competing with an offer the client has already read.
What is a good break even on a refinance?
Short enough that the client is comfortably still in the mortgage by the time the savings turn positive. A break even of eight months means the penalty is paid back by month eight and everything after that is savings. A break even that lands past the end of the remaining term is not an opportunity.
Can I do this in a spreadsheet?
Yes, and that is where RateGuardPro started. A spreadsheet handles a maturity sort and a rough rate gap. Where it runs out is penalties, because every lender calculates the differential differently, and because balances and rates change faster than a manual file gets updated.
Keep reading
Mortgage monitoring, explained covers what monitoring is, what gets watched on every funded mortgage, and why the manual version runs out of room.