We currently have a five-year variable rate mortgage that's due in October. We want to sell our condo, but we don't know how long it will take to sell and when we'll get around to putting it on the market. Our mortage is currently .7 below prime, which is currently then 2.3%. We definitely want the variable rate again because it works best for us, but we don't want to be where we are for one more year, not to mention for five more years. So we'd definitely cancel it at some point.
I wonder if someone could explain how it works with mortgage buyout clauses. As I understand it, if we cancel our mortgage prior to when it comes due, we have to pay three months of interest. So is it so then that the penalty would be the same regardless of the length of the mortgage itself?
Meaning that if we have a five-year variable mortgage or a three-year fixed mortgage or a one-year fixed mortgage, the only thing that would influence the figure for an early cancellation would be the interest rate of the mortgage itself. But the length of the mortgage doesn't have an influence on the interest penalty. Is it clear what I'm asking? I hope so.
I wonder if someone could explain how it works with mortgage buyout clauses. As I understand it, if we cancel our mortgage prior to when it comes due, we have to pay three months of interest. So is it so then that the penalty would be the same regardless of the length of the mortgage itself?
Meaning that if we have a five-year variable mortgage or a three-year fixed mortgage or a one-year fixed mortgage, the only thing that would influence the figure for an early cancellation would be the interest rate of the mortgage itself. But the length of the mortgage doesn't have an influence on the interest penalty. Is it clear what I'm asking? I hope so.