The options

Stress test your own debt - toronto mortgage broker ingrid mcgaugheyWell done! You’ve made it this far along your home ownership journey. Now is a good time to consider your mortgage options. Why are options important? Isn’t the mortgage rate everything? Well, the answer is yes…and no. Yes, you can save money by getting a low rate. But also no, because a low mortgage rate can lock you into a situation that is not suitable to your personal circumstances, and you can end up paying a lot of money trying to get out of it. Read on:

Early payout penalties

At some point, no matter how perfect the home you are buying, breaking your mortgage may make good financial sense. But paying out your mortgage early comes at a price, so choosing a lender that has a fair prepayment penalty can save you thousands. Bare-bones mortgages with low advertised rates may not allow you to pay out your mortgage at all, forcing you to wait until you sell your home, or your term is up.

Pre-payment privileges

You can save money on interest by paying down your mortgage more quickly with increased payments as well as lump sum amounts. The flexibility of this mortgage option is useful if your situation changes, or if you want to reduce an early payout penalty by reducing the dollar amount of the mortgage on which the penalty will be calculated.

Porting flexibility

Are you planning to change jobs? Is your family growing or changing? Not sure? There may be a chance you’ll want to move. Make sure you can avoid penalties by “porting” your mortgage to your new place, with the option of increasing your mortgage amount if needed. Life happens – be ready and save lots!

Blended/extended mortgage

You may want to increase your mortgage amount down the road – a ‘blended’ mortgage means you can blend the rates on your existing and new mortgage amounts, while avoiding a penalty to break your current mortgage. ‘Extending’ this blended rate to the end of your new mortgage term may also be an option.

A mortgage customized to your situation can give you the most savings – and the most flexibility. Call me and we can discuss the right mortgage rate – and the right mortgage options – for you!

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