Interest rates have been falling and many would benefit from breaking your mortgage and transferring the mortgage to another institution.  The new institution will generally cover the cost of appraisal and legal fees.  They will not cover the cost of pre-payment penalties and the discharge fee (some institutions will allow the borrower to include penalties in the new mortgage, however).

Deciding to transfer and break your mortgage depends on the a number of factors: the remaining term, the interest rate on your mortgage, current interest rates, the prepayment penalty and your expectation on where interest rates are headed.

If you haven't had your mortgage review for some time, it is about time that you did.  BC Mortgage is happy to help you quantify the benefits of breaking your mortgage. 

BC Mortgage will calculate the cost/savings of transferring your mortgage using three approaches:

Approach No 1: The first approach compares the cost of doing nothing versus transferring the mortgage to another mortgage with another lender for the remaining term of your mortgage.  For example, if you have 2 years left to go on your mortgage at 6.5% and the current interest rate on a 2 year mortgage is 4%, BC Mortgage will provide you with a calculation of the savings/costs in transferring that mortgage.

Approach No. 2: The second approach assumes you expect interest rates to rise and you want to extend and lock-in at current interest rates now.  Say, you are 3 years in to your 5 year mortgage.  With interest rates on the rise, you are considering breaking your current mortgage and taking out a new mortgage for another (longer) term.

Approach No. 3: The third approach is to switch your current fixed rate mortgage to a variable rate mortgage.  You would consider this approach if  you expect interest rates to remain stable or decline.

See a sample mortgage analysis

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