Cancel and transfer mortgage

[bbrannan]

Just wondering what is involved (fee's/penalties) if i wanted to cancel my current mortgage (in year 3 of 5year term) and remortgage with another bank for a lower rate?

is the 1% or 2% i save on say a 5 year fixed out weigh the fee's/penalties of cancelling my current mortgage?

thx

[Tik-Tok]

Originally posted by bbrannan
Just wondering what is involved (fee's/penalties) if i wanted to cancel my current mortgage (in year 3 of 5year term) and remortgage with another bank for a lower rate?

is the 1% or 2% i save on say a 5 year fixed out weigh the fee's/penalties of cancelling my current mortgage?

thx

That would depend on how much your mortgage is.

Generally speaking, getting out of a mortgage term early is about 3 months interest (which really isn't much), and if you can save over 1%, it is probably worth it. (once again though, it depends on how much your mortgage is, and if your current mortgage bank has the normal fee's and penalties)

[barmanjay]

payout penalties vary from lender to lender,.. ask them what it is. This will help you determine if it's better.

[Xtrema]

Originally posted by barmanjay
payout penalties vary from lender to lender,.. ask them what it is. This will help you determine if it's better.

:werd:

TD used to be 3 months of interests. But then last week, they quote me another number that's closer to 6 months of interests. 3 months of interests is minimum, not the maximum.

[JordanLotoski]

I just paid a 15,000 penalty to get out of mine....over the course of 5 years i will save over 25,000.

I went from a 5.93% to a 4.00%

[sputnik]

Originally posted by MIWYFSHOT
I just paid a 15,000 penalty to get out of mine....over the course of 5 years i will save over 25,000.

I went from a 5.93% to a 4.00%

Who gave you a 5yr rate at 4%?

[Weapon_R]

Lots of lenders are giving them. I just renewed mine at 4% for 5 years too. Prime + 1 isn't hard to get.

[bbrannan]

3 more quick questions:

1- lets say it cost me $15,000 to cancel the mortgage early but with my new rate over 5 years i would save $25,000 in interest. how or who consumes that $15,000 fee for cancelling? does the new mortgage provider cover that by adding it to the mortage amount?

2- if i cancel my mortgage with my current bank and then start over with a new bank/broker. do i have to worry about another %20 down payment to waive the CMHC fee. or does that get waived because i was already a home owner of the same property.

3- in most case's can you get the new lender to pay the cancellation fee's of your previous lender for bringing them new business?

[ckangarloo]

^15000 to cancel a mortgage?? Seems pretty high. You must have a huge mortgage. I canceled my mortgage last June and it cost me 3 months interest, came to a bit over 3K. Not sure if your new mortgage would roll the cancellation penalty into itself, don't think so but you should contact a mortgage broker or real estate lawyer. They will both be very happy to help you in these times of ours.

[roopi]

If you have the original mortgage contract you signed the cancellation penalites should be written in there.

[el-nino]

Originally posted by bbrannan
3 more quick questions:

1- lets say it cost me $15,000 to cancel the mortgage early but with my new rate over 5 years i would save $25,000 in interest. how or who consumes that $15,000 fee for cancelling? does the new mortgage provider cover that by adding it to the mortage amount?

2- if i cancel my mortgage with my current bank and then start over with a new bank/broker. do i have to worry about another %20 down payment to waive the CMHC fee. or does that get waived because i was already a home owner of the same property.

3- in most case's can you get the new lender to pay the cancellation fee's of your previous lender for bringing them new business?
1. You do. You can either pay that up front or add that to your refinance.
2. No. The CMHC fees have allready been added to your mortgage. If you were to increase the amount you would have to pay a top up fee on the difference.
3. More so on a atraight switch then a refinance.

[el-nino]

Originally posted by ckangarloo
^15000 to cancel a mortgage?? Seems pretty high. You must have a huge mortgage. I canceled my mortgage last June and it cost me 3 months interest, came to a bit over 3K. Not sure if your new mortgage would roll the cancellation penalty into itself, don't think so but you should contact a mortgage broker or real estate lawyer. They will both be very happy to help you in these times of ours.
Most likely paid Interest Rate Differential.
I have seen these penalties as high as 50k.

[bbrannan]

thanks for all the answers. gives me somewhere to start at least. can anybody recommend an awesome mortgage broker. heard good things about canadian mortgage professionals inc. in kensington?

[el-nino]

You can use me :) pm me and I can work some numbers for you.

[sputnik]

Originally posted by Weapon_R
Lots of lenders are giving them. I just renewed mine at 4% for 5 years too. Prime + 1 isn't hard to get.

Sounded like he got a fixed rate mortgage.

I would consider it strange to pay $15,000 to save $10,000 while still having the chance that interest rates go up.

[JordanLotoski]

^^^ Its paying 15,000 to save over 25,000 and its a fixxed rate

[sputnik]

Originally posted by MIWYFSHOT
^^^ Its paying 15,000 to save over 25,000 and its a fixxed rate

$25,000 gross or net?

Who gave you a 5yr fixed rate at 4%?

[bbrannan]

Originally posted by el-nino

Most likely paid Interest Rate Differential.
I have seen these penalties as high as 50k.

differential sounds about right. i just called CIBC and they quoted $17,000 to cancel the mortgage based on Interest Rate Differential..

[el-nino]

Ok. I will work some numbers for you. Pmd.

[jonnycat]

I was quoted an 11 month penalty of $9000 after they stated it is only a 3 month penalty. Fuckers.

I'm making my maximum allowable contribution of 25% / year and then closing it off April 1st.

[Euro838]

Another option is if you have a secured line of credit at like prime, you may be better off just maximizing payments(and yearly lump sum) rather than paying the penalty and refinancing. Even in MIWYSHOT case, it would take him about 3 years to start seeing the real savings.

Only problem with dumping on your LOC is that you can maintain the cash flow as your monthly mortgage does not change but you now have big interest payments from your LOC.

[lasthuzzah]

You would've been better off putting the 15K into your principle.

[bbrannan]

putting money down on principal wasn't a big deal. we threw down $100,000 down payment when we bought. just trying to find away to make use of these new historic low rate's even if it is long term 5 years+ before you see the benefits if any at all. the key im looking for though is not having to pay the discharge fee out of my own pocket and not increasing my mortgage payments by more than $40.

so far after talking to a few mortgage specialist's (el-nino included) it's gonna work out for me in 1 of 2 ways..

1. remortgage at lower rate, wrap dishcarge fee into new mortgage and refianance an extra $30,000 into the principal to pay off all debt at higher interest rates (car, credit card, etc.)

as long as the house appraise's good. no cmhc fee's and i walk out even after 5 years but all debt paid out.

2. remortgage at lower rate, wrap dishcarge fee into new mortgage.

as long as the house appraise's good. no cmhc fee's and i walk out saving cash over 5 years and mortage payments drop a bit. it's not money in my pocket today that i see it's almost like an invisible savings that you don't care about until you see how much faster it takes to pay off your house.

and i'd just like to say screw the banks...hahaha. i also talked to 2 people at CIBC that said "yeah only 3 month interest for discharge" until i insisted in talking to a real mortgage specialist who soon changed everybodies mind with that Interest Rate Differential crap..

[redsrt4]

Originally posted by MIWYFSHOT
I just paid a 15,000 penalty to get out of mine....over the course of 5 years i will save over 25,000.

I went from a 5.93% to a 4.00% where did u get the 4% 5yr. fixed rate?? i need to renew my mortgage next month..

[JordanLotoski]

Industrial Alliance ( they are based out of Quebec, pretty big company out there)

[Weapon_R]

National is offering 4% right now on a fixed-variable mortgage.

[sputnik]

Originally posted by Weapon_R
National is offering 4% right now on a fixed-variable mortgage.

First National only has a 4% rate on their 1 year fixed rate.

http://www.firstnational.ca/default.aspx?menuId=5&catId=1

[atgilchrist]

Originally posted by redsrt4
where did u get the 4% 5yr. fixed rate?? i need to renew my mortgage next month..

Check out ING as well.