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.
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This sounds like a great opportunity to restructure your mortgage payment options, especially during times where money is becoming more scarce. I have a friend who is a similar situation as the client mentioned above. Who should he contact to possibly save money or to change his mortgage payments? Would he have to go to a new mortgage broker or would that same one be able to help him out?
Thanks for the post and for reading my blog
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The variable interest rates have increased this I posted that blog, the best varible rate currently is prime -.1% which is 2.9% currently. What rate is your friend currently getting? He could go to his original broker and they should be able to help him out, if not I could help him out, my number is 403-803-6625.