Today’s current interest rates are still at their low, one of the lowest in history due to the pandemic. This is a good time to consider breaking your existing mortgage and getting a new one to achieve the total amount you need. In order to break your current mortgage, your lender has the power as it is one of his rights to charge a penalty based on the larger of three months’ interest or the interest rate differential (IRD). This IRD is basically the difference between your former rate and the current rates of your current term.
Different lenders calculate IRD differently, based on their terms and conditions. You have to understand and read the terms of conditions of your bank for you to understand how to calculate your IRD. To get the actual penalty from your lender, you must request it. Typically, the three-month penalty applies to you if you are in a term that is longer than five years and you are past the fifth year. This applies to you and not the IRD, which will make your breaking mortgage more appealing.
Another option is to compare your new rate (either blended or extended) with the rate you plan to get with the new mortgage. The exact terms and conditions of your existing mortgage plan need to be reviewed by the lenders to determine if other factors need to be considered.
We are up-to-date on the current and latest trends rates and all-new available opportunities for you. We guarantee and assure you that it is worth your time and effort to ask a professional mortgage expert like us. Let us analyze and determine the options available for you and choose which is most beneficial for you and your situation. You can choose and decide from a broad range of lenders in our portfolio. We can definitely help you with all of your mortgage details for your next home and other properties.