After helping a MonsterMortgage.ca client break their mortgage earlier this week, I thought it would be a good idea to make people aware of an important fact your bank won’t tell you about breaking your mortgage in today’s market.
The Big Banks are trying to keep pace with the amount of people hoping to break their mortgage to take advantage of lower interest rates. BEWARE!!! In order to prevent people from breaking your mortgage, one of the terms added by banks in new mortgage contracts is that a bank can change the penalty charged to clients up until time of closing.
What does this mean? If you are looking to break your mortgage, you may be quoted one penalty fee this morning and once you sign off on the new mortgage terms and conditions, the bank has the right to increase the penalty fee up until the deal is officially closed and registered by your lawyer. Imagine being ready to break your mortgage after being quoted a fee of $2,500 by your bank one day and a few days later at time of closing that fee has tripled to $7,500…it can happen and it has happened to consumers looking to break their mortgage.
REMEMBER if you are serious about wanting to break your mortgage request a payout statement from your existing lender (NOTE: as the mortgage holder you are the only one authorized to do this).
Most lenders will allow the penalty that you are quoted on your payout statement to be valid for anywhere between 10 – 30 days. With this in hand, you are well equipped to break your mortgage; you can speak to your mortgage agent who can review all the terms and conditions with you and shop the marketplace for a better rate.
GET THE FACTS YOUR BANK WON’T TELL YOU and make sure you understand all of the terms and conditions of your particular mortgage.
As always, if you have any questions regarding breaking your mortgage, feel free to comment below or contact me at Roy@MonsterMortgage.ca .