One of the most common questions we are asked is: “Is it time for us to get out of our existing mortgage, pay a penalty (if appropriate) and refinance at a lower rate?”
The most important thing to realize is there is no easy answer. When we receive a call there are important questions we ask: What is your current interest rate? What is the remaining term on your mortgage? What are your monthly, bi-weekly, semi-monthly or weekly payments?
The above information will supply us with the tools to be able to calculate if it is worthwhile to pay a penalty (if appropriate) and refinance at a lower rate.
What you must realize is by lowering the interest rate and leaving your payments the same as when your rate was higher, the principal amount on your mortgage will reduce much quicker thereby saving a lot of future interest costs and building up the equity in your property at a faster rate.
Also, when it comes to a future renewal, the principal balance of your mortgage will be much less.
If you are worried about inflationary aspects in the future and rising interest rates you may wish to renew your mortgage early and guarantee a rate to hopefully carry your mortgage over a period where mortgage rates may increase in the next year or two, when your mortgage may be coming up for renewal. Plus, if you are on a tight budget, lower payments may help ease the cash crunch you may be in now or the future.
If your mortgage is up for renewal in the near future and you wish to leave your existing financial institution, it may be possible to “switch or transfer” your mortgage without having to pay fees.
There are many interest rate options and terms available: closed, fixed rate mortgages from six months to 10 years; closed, variable rate mortgages for three to five years at historically low rates; open variable rate mortgages and credit lines at competitive rates. We will find the best rates and terms to fit your needs to ensure we do what’s best for you.
We have seen the ups and downs of mortgage interest rates over our many years of lending and we can tailor a new mortgage to suit your needs at very low, competitive interest rates. A five year fixed rate is at 2.69 per cent.
