Should I Break My Mortgage?

Interest Rates are once again grabbing headlines in the media as the market heats up for the busiest mortgage lending time, the spring market. Lower fixed rates and lower prime rates mean less expensive mortgages for those looking to buy a home, refinance or renew a current mortgage. This is a great time to do an analysis of your mortgage to take advantage of these lower rates and increase payments, reduce amortizations, and save interest costs. The big question is: Should I break my current mortgage and take advantage of today’s new lower rates? While there is no one answer, every situation is different, there are a few steps we can take:

• Let us crunch the numbers: We can calculate what your interest savings would be if you were to refinance (or transfer to another lender) and whether the savings are enough to offset any penalty owing for breaking your current mortgage. By getting into a lower rate now (whether fixed or variable) you can position yourself strategically for when, and if, rates start to increase.
• Review your current financial situation: Are there high interest credit card debts or other loans you could pay out by refinancing your mortgage? Are there renovations or home improvements you have been putting off? Could you be topping up your RRSP’s and investments?
• Reduce your amortization, not your payment: If it makes sense to refinance, and if the current payment is manageable, then consider sticking with the same payment but reduce the amortization. By doing this you can pay off the mortgage faster.

Lowering your mortgage costs can be a smart move. As your mortgage broker, we can help guide you through the opportunity today’s lower rates may present. We can review your calculations and analyze a variety of options for you to consider based on discounted rates with access to many different lenders. Let’s see if we can help save you money and get you mortgage free faster. Inquire today!