mortgage advice please

[SportSavant]

I just bought a house in the north shore (montreal area) for 318K.

Current mortgage is 265K.

Amortization = 40 years.

Rate = 5.69%

Bi weekly payment = 615$

Term = 5 years. (in canada we have "terms" and the standard term is 5 years, we cant lock in to a low rate for 25-30 years like you can in the states, standard terms are 5 years then you have to re-negotiate a new term based on new rates)






I am thinking of early renewal:

Amortization = 40 years

rate = Prime (currently 4.75%) - 0.80% = 3.95%

new payment = 489$

Term = 5 years

PENALTY: 3756$

Is it worth it to pay this penalty to switch the mortgae type? I would plan on making much larger payments than my actual payment of 489$ bi-weekly.

 

[desrat]

http://www.bankrate.com/brm/calc_vml/refi/refi.asp

where it says points put in your penalty. Are the loans only available in 40 yr Amortization? Also do you get charged for the bi-weekly payments? If so, just go with monthly payments and make an extra payment yourself. The fees charged to "allow" you to pay your principal early are on of the biggest rip-offs in the mortgage business, at least here in the US. Not entirely sure of the rules up North.

 

[desrat]

PS Go Flyers :tongue2:

 

[Doug]

PENALTY: 3756$

Why the penalty ?

 

[SportSavant]

PENALTY: 3756$

Why the penalty ?

I negotiated a new mortgage at a 5 year term at 5.69%.

If you RE-NEGOTIAATE, to take advantage of better mortgage rates now
and change the mortgage there is a penalty for that.

Mortgages are a bit different in CDA than USA

 

[SportSavant]

Here are some of the answers I got on a Canadian forum about getting the best deal:

http://www.redflagdeals.com/forums/showthread.php?t=584308