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
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