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Backing out of your mortgage early?

General Angela Calla 22 Aug

Backing out of a mortgage early? You probably won’t be able to avoid fees entirely, but you can limit them. A rise in interest rates appears imminent, so folks with big mortgages may want to lock in the current low rates now! But, for some, that means getting out of an existing mortgage early.

Trying to discharge your mortgage early comes with a cost. After all, banks are in the business of making money, right? The sad truth is banks can be very greedy when it comes to calculating the interest penalty on a mortgage you’re trying to renew early.

 Once upon a time, the standard in the industry was to charge a three-month interest penalty for early discharges. CMHC paved the road for that because they had it written into their policy. But when they removed it back in 1999, they’ve created a feeding frenzy among banks who now want to charge what’s called the Interest Rate Differential: a calculation they can do any way they want because there’s no uniform system among lenders or regulation by the Bank Act.


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The Angela Calla Mortgage Team looks to place your mortgage first (provided you qualify) with a lender that does not have posted rates to minimize any breaking early costs to help you optimize the market to your best ability.

Questions on your mortgage? Contact The Angela Calla Mortgage Team directly 604-802-3983