Mortgage General

Breaking Mortgage Contract: What Is breaking a mortgage contract and What are Fees Associated with it?

By September 1, 2022 May 25th, 2023 No Comments

To break a mortgage contract, you’ll need to renegotiate with your lender. This is also known as breaking your mortgage contract.

The cost to break your mortgage contract is impacted by whether your mortgage is open or closed. An open mortgage enables you to break the contract without paying a prepayment penalty. However, if you have an existing fixed-rate loan, which has already been paid off in full, then breaking the contract could mean paying fees for re-appraisal, administration, and reinvestment costs. This will depend on how much time is left on the original term of your loan, as well as where interest rates are heading at the time of breaking your mortgage.

It’s important to understand that you may have to pay a prepayment penalty if you decide to break your mortgage contract. A prepayment penalty is a fee charged by the lender for paying off your loan before its maturity date.

Other cost associated with breaking your mortgage contract include:

  • Administration fees.
  • Appraisal fees.
  • Reinvestment fees.
  • A charge on your current mortgage and register a new one, also known as the mortgage discharge fee.

But don’t rush into anything. Many complex factors affect the cost, and deciding whether it is worthwhile to break your mortgage contract will depend on your specific situation. Weighing the positives and negatives and consulting a financial specialist will help you make an informed decision regarding your mortgage. It’s not easy to break a mortgage contract, but we can help you with the right strategy and help you plan for your financial future.

March 20, 2024 in General Knowledge

How Much Do Millennials REALLY Need To Save For Retirement?

Are you a millennial wondering how much you should accumulate for your golden years? You're not alone. Particularly for our generation, retirement planning is not a universally applicable proposition. Millennials…
Read More
March 19, 2024 in General Knowledge

Canada Interest Rates on Hold: Bank of Canada Maintains 5% Rate to Fight Inflation

The Bank of Canada's recent decision to keep its key interest rate steady at 5% has sparked widespread interest and speculation Amidst ongoing worries about inflation and economic uncertainties, the…
Read More
March 8, 2024 in General Knowledge

Swipe or Load? Unveiling the Secrets of Prepaid Travel Card vs. Credit Cards for International Travel

What if I told you that deep inside your wallet is a secret code allowing you to maximize the amount of money you save on travel? Imagine yourself at the…
Read More
March 5, 2024 in General Knowledge

Credit Card Confusion? Everything You Need to Know (But Were Afraid to Ask!)

Have you ever wondered how credit cards operate? They're not just shiny pieces of plastic; they're powerful tools that simplify purchases When you swipe your credit card, you're essentially borrowing…
Read More
February 27, 2024 in General Knowledge

Does Your Home Insurance Cover Damage from Extreme Cold? Understanding Your Coverage

In Canada, where winters are notorious for their bone-chilling temperatures, having robust home insurance isn't just a luxury – it's a necessity As the mercury drops, the risk of costly…
Read More
Popup