Calgary Mortgage Tips

Are you paying too much interest on your variable rate mortgage?

I have found the potential savings for people who currently have a variable rate mortgage at prime (3%) or prime plus are substantial. If you have a variable rate mortgage and your rate is prime-.4% or higher you should seriously consider calling your mortgage broker to find out how much money you could save on your mortgage. Here is an example:

I have a client who currently has a variable rate mortgage and his rate is prime+.3% which is 3.3% today. He has 3 years and 8 months left in his term with his current lender and a mortgage balance of $285,969.75. If he were to transfer his mortgage to another lender who is offering prime-.9%, 2.1% today he would save $7,402.20 on his mortgage over the next 3 years and 8 months that’s including the payout penalty. Here is the breakdown:

•  Savings in payments = $6430.80 
•  Saving in the decrease of  the mortgage balance at the end of the term= $3,310.40
•  The total savings are = $9,741.20
•  The payout penalty was $2339, so after the penalty the total savings were $7,402.20.  

As you can see the savings are substantial and in only 3 years and 8 months.

If you have the money to pay your penalty you can do a transfer and the new lender will pay for the legal fees and appraisal if needed. Some lenders can even tack on some of the penalty.

If you have any questions about this or if you would like to see if it’s worth it for you to transfer your mortgage please feel free to contact me for a free no obligation consultation 403-803-6625.

My website

June 9, 2011 Posted by jackiefrost | Mortgage advice | 2 Comments