Mortgage Payout Penalties – Grant Wiebe’s Kelowna Real Estate Video Blog

When paying out your mortgage early as a result of selling your property or in an effort to secure a lower rate, many people assume that they will have to pay a payout penalty of 3 months interest. The reality in today’s market with falling mortgage rates is that the penalty may be much more than that. Lenders use whats called “Rate Differential” to ensure that they don’t suffer losses when they lend out the money they are getting back from you early. If today’s rates are less than the rate you agreed to when you signed your mortgage contract, you may be faced with a much higher penalty than 3 months interest. Check with your lender before you make any big decisions. Grant Wiebe – Kelowna Realtor 250.869.2279 Century 21 Assurance Realty Ltd July 22, 2011 How will world events impact your mortgage? Europe has an ongoing debt crisis. The US is locked in political impasse over the debt ceiling. And the Canadian dollar keeps rising. All of these will be key factors that will make it difficult for the bank of Canada to raise rates in October.
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