Should you break your mortgage?
February 28, 2015 | Posted by: Mike Garganis
Just saved a client $15,000. Is your rate above 3%? You could be next!
I don’t advocate paying penalties, however, if there is an obvious savings to be had, then you have to do it. We have reached a point where interest rates are so low, it’s worth a review.
I had a new client contact me about breaking his mortgage. His rate was 3.59%. The balance was over $500,000. I reviewed his options and this was a no brainer.
Penalty to break the mortgage was under $5,000 (lucky he wasn't with a BIG SIX BANK). But the savings over the next 5 yrs would be $20,500. His net savings was $15,000.
A second client had $190k remaining @ 3.88%. The net savings after penalty was $8.000. Again, I recommended that my client go ahead and do it.
If you are in a mortgage with a rate above 3% today, then you could be losing money.
It’s not hard to figure out if this is worth it for you. Numbers don't lie.
You might save $$thousands!