Consider the cost of penalties when breaking a mortgage Oct 17th

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Consider the cost of penalties when breaking a mortgage

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OTTAWA – Mortgage rates are near-record lows, but brokers say those shopping around for a loan should look beyond the rates they’re being offered and pay close attention to how much it will cost to break their mortgages.
Divorce, a desire for a new and bigger home or an opportunity to move to another city for a new job — all may prompt people to want out of a five-year mortgage early, and the penalties vary depending on the type of mortgage they have and the lender involved.
Greg Williamson, founder of the Canadian Home Buyers Academy, says nobody signs a fixed rate five-year closed mortgage thinking they’re going to have to break it, but a significant number don’t make it the full term.
“It doesn’t really become a problem until two or three years down the road when I get divorced or whatever happens and I’ve got to break the mortgage and then I get absolutely whacked,” Williamson said…

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