Posted on: 25-03-08 20:49:21
I have repaid 3 of the 1st 5 year term of my mortgage at a fixed rate of 4.5%. I am now selling my old house to move to a larger house. The current Banker is willing to extend additional finance at a combined rate of 5.3% without any pre-payment penalty. Will someone guide me if its a good deal?
Thanks in anticipation
Balaji
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Good luck to everyone
Quote:
Originally posted by balaji46
I have repaid 3 of the 1st 5 year term of my mortgage at a fixed rate of 4.5%. I am now selling my old house to move to a larger house. The current Banker is willing to extend additional finance at a combined rate of 5.3% without any pre-payment penalty. Will someone guide me if its a good deal?
Thanks in anticipation
Balaji
Well it is a good deal for your bank. They get you for another 2 or more years and a regular income stream at 5.3%.
Now whether it is a good deal for you or not, can only be determined by taking in to account your remaining mortgage amount, penalty amount if the present mortgage is broken, the additional amount you require in mortgage, and last but not the least, how comfortable you are with variable rate mortgage instead of fixed rates. Send me an email with numbers and I can help you determine the same.
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Pramod Chopra
Senior Mortgage Consultant
Mortgage Alliance Company of Canada
The initial mortgage was about $234,000 of which I made a pre-payment in the first year. Currently the balance is about $195,000. The new amount of mortgage is 270,000. I was paying at 4.5% flat and the term was scheduled to end in Jul 2010. I was told by my mortgage agent that the bank was willing to waive the penalty of foreclosure if I took the new mortgage at fixed rate of 5.3%.
Pls advise
Thanks
Balaji
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Good luck to everyone
Quote:
Originally posted by balaji46
The initial mortgage was about $234,000 of which I made a pre-payment in the first year. Currently the balance is about $195,000. The new amount of mortgage is 270,000. I was paying at 4.5% flat and the term was scheduled to end in Jul 2010. I was told by my mortgage agent that the bank was willing to waive the penalty of foreclosure if I took the new mortgage at fixed rate of 5.3%.
Pls advise
Thanks
Balaji
Since you have a mortgage agent, he/she would be in a better position to answer your questions.
However, please let me know the penalty amount for breaking the mortgage (I think that it could be around $2200), your comfort level with Variable rate mortgage, the new term for this 5.3% and if you do not have any objection, then the bank you are with for mortgage right now. This information would help in arriving at a clearer picture.
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Pramod Chopra
Senior Mortgage Consultant
Mortgage Alliance Company of Canada
