Whether you are looking to refinance to pay off debt, purchase a second home/vacation property or invest – breaking your mortgage is going to cost you!
Prepayment penalties are the banks way of recouping the interest lost on a mortgage that doesn’t complete the full closed term that was originally agreed upon by you, the borrower and them, the lender. Knowing what these costs are before you proceed with changing your mortgage, is the best way to determine if this is beneficial for you or not.
A professional Mortgage Broker will be able to show you the pros and cons of breaking your mortgage term. They will assist you in calculating the penalty and in the case of paying off debt, determine if the savings in interest will offset that penalty.
In some cases it is unforeseen circumstances that force you to break the term of your mortgage prior to maturity. Your mortgage broker can still find out if the mortgage is portable to another property, transferable to another person or in some cases, they may be able to negotiate less of a penalty on your behalf.
Knowledge is Power and a mortgage is not only about a Rate. Consumers should also be concerned about the actual mortgage product itself. Before signing the mortgage commitment they need to ask their mortgage broker what are the prepayment privileges and penalties.
Life can change in a moment and being informed and prepared is the best way to handle any circumstance.
Don’t get stung by the Banks!
Give me a call today at 905 793 0700 ext 370