Toronto Mortgage Expert on Breaking your Prime plus Mortgage

Does it make sense to get out of your mortgage that is at a "prime +" rate?

Answered by mortgage broker David Plaxton 

Photo by Dave Dugdale
Photo by Dave Dugdale

Yes, it could make excellent financial sense, depending on your situation. Assume you got your Prime Plus Variable Mortgage 2 years ago, you have 3 years remaining until you renew, and your mortgage balance is currently $150,000. Over the next 3 years, your total interest costs will be $19,299. But, if you break your mortgage and take a new one, the next 3 years at today's rates will only cost you $10,061 in interest. After you net out the penalty to break your mortgage, you are better off! Your principal balance will also be slightly lower after those 3 years, which is a further benefit.

David Plaxton AMP
M08003352
Mortgage Planner

905-874-1680
416-540-1713
http://www.tellemonline.com/asp/archive.html?archive_num=8042

2 comments on “Toronto Mortgage Expert on Breaking your Prime plus Mortgage

    1. Hi David!
      It would be good for you to call your current lender/bank to find out what penalty they would charge you to change your current mortgage terms. Interest rates are still so low, and it may save you a lot of money to modify your mortgage now. If you would like to look at some options, feel free to contact Carrie Davidson at cdavidson@dominionlending.ca.
      Hope this helps!

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