Refinancing Your Mortgage
Should you break your mortgage for a lower rate?
Yes and no. When you break your mortgage contract to renew your mortgage at
a new rate and a new term, you're faced with a prepayment charge to reimburse
your financial institution for the lost interest income. As a basic rule
of thumb, the prepayment charge is based on three months interest or the
interest rate differential (that's the difference between you present mortgage
rate for the balance of your term and the current rate you want to take out),
whichever is greater.
If your mortgage is insured by the Canadian Mortgage and Housing Corporation,
you pay a maximum penalty of three months interest after the third anniversary
date of the interest adjustment period, or after the third anniversary date
from your most recent renewal.
The amount of the prepayment charge will tell you whether or not you should
renegotiate your interest rate. Generally speaking, the shorter your remaining
term - ideally less than a year - the smaller the penalty, and the more attractive
early renewal becomes. On the other hand, the longer the term left on your
mortgage, the greater the prepayment penalties, which makes early renewal less
desirable. We can find you a lender that will actually
pay some or all of your penalty to get your mortgage business… let us
show you how!
We can calculate it for you
Since we have information on most lenders, we can easily make the calculations
to determine if you should break your mortgage to take advantage of current
lower rates. We'll make your decision making easy for you.
We run a mortgage analysis
on your mortgage, and when the current discounted rates are lower than your
existing mortgage, and the savings is greater than your early renewal penalty,
we will notify you of the opportunity to switch your mortgage and save money.
It’s that simple. You choose when and where you switch your mortgage.
There are NO fees to you, only a savings in mortgage interest