Mortgages in Canada can be a murky subject – one that we hope to shed some light on with a series of highly informational articles.
Latest News
Mortgage payment calculator + MORE Aug 24th
For the majority of Canadians, buying a home will be the single biggest purchase they ever make, and getting a mortgage is an essential part of this process. But how do you ensure you get a mortgage that you can actually afford over the long term? That’s where a mortgage payment calculator com.... More »
2023 mortgage market year in review Dec 31st
As we wrap up a year full of economic twists and turns—and interest rate ups and downs—we wanted to look back at some of the top mortgage-related stories that graced our pages in 2023..... More »
OSFI leaves mortgage stress test in place, reaffirms LTI limits for lenders + MORE Jan 29th
OSFI offered no new direction on the qualifying rate, but reiterated that loan-to-income caps for uninsured mortgages remain in place and opened a new six-month consultation tied to its broader guidance review..... More »
Fixed-Rate Increases Costing Today’s Homebuyers Over $10,000 More in Interest + MORE Nov 13th
Fixed mortgage rates have been climbing steadily since September. But by how much at what cost for new homebuyers?.... More »
“Should we refinance our mortgage?”
– moneysense.ca
Q. We’re thinking about breaking our existing home mortgage to take advantage of the low interest rates we’re seeing now, and would appreciate some guidance. This is our scenario:
Mortgage principal: $572,000
Weekly payments: $746.00
Interest rate: 3.78% fixed and locked in until December 2023
Penalty fee for breaking mortgage: $33,000
If we decide to pay the penalty, we could lock into a four-year mortgage at 1.74% fixed, which looks like it would save us approximately $2,500 to $3,000 worth of interest payments.
Mortgage principal: $572,000
Weekly payments: $746.00
Interest rate: 3.78% fixed and locked in until December 2023
Penalty fee for breaking mortgage: $33,000
If we decide to pay the penalty, we could lock into a four-year mortgage at 1.74% fixed, which looks like it would save us approximately $2,500 to $3,000 worth of interest payments.
Here’s where I think it gets interesting. If we decide to continue paying the same weekly amount of $750 that we do now, and put the extra money towards principal, the difference between that at the new weekly mortgage payment of $570 would be $175—giving us $8,400 per year to put directly towards principal. Over four years, that should allow us to reduce our principal by $33,600.
It seems like if we should consider breaking our mortgage to take advantage of the lower rate…
