There are numerous good reasons as to why mid-term you may be considering the option of breaking your mortgage. You may have found yourself in need of extra finances, have located a much better rate, are aiming to consolidate high interest debts, are interested in early renewal or are paying out the balance of your home loan early.
Before you make your decision, you will need discuss the option with your mortgage broker and weigh the mortgage penalty fee against your potential future savings.
The Mortgage Penalty Calculator is a helpful resource Canadian Mortgage Trends has supplied to Canadian mortgage holders amid these important considerations. The calculator can provide you with an estimation of what your penalty fee will look like as you determine your best financial route.
It is important to remember every lender is different and will follow their own policies depending on the terms of the mortgage. In most cases, the breaking of a mortgage contract will result in a three month interest charge or the payment of an Interest Rate Differential. The Mortgage Penalty Calculator will give you an approximation of each of these fees.
For concrete numbers and the advice that will prove most beneficial to you, talk over your financial goals and needs with your mortgage broker. An upfront fee now may grant you the equity you need plus lower your payments over the next five years, or however long you choose to commit to in your next mortgage term.