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Breaking Mortgage
http://www.hawthornevillager.com/phpbb/viewtopic.php?f=1&t=31695		 Page 1 of 1
Author:  Matt [ Tue Nov 02, 2010 10:45 am ]
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I had to pay 3 months interest as a penalty about 6 years ago.
Then depending on how much the mortgage is going up, you may owe extra CMHC fees.

Matt
Author:  Norts999 [ Tue Nov 02, 2010 10:53 am ]
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Can not be negotiated.
Potentially another bank would reimburse you if you switch your mortgage, but this would be very rare in this interest rate environment.
Can you not port your mort to the new home?
Author:  kaushen79 [ Tue Nov 02, 2010 10:54 am ]
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I broke my mortgage term with TD and after negotiating with them they waived the penalty for me. In the past, I broke a mortage term with CIBC and did an early renewal and they also waived the fee.
Conrad
Author:  Fred D [ Tue Nov 02, 2010 10:55 am ]
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Hi Matt!

The bank and mortgage folks will respond soon I'm sure, but every situation is different.

If the interest rate is lower on the new term, you may be charged an interest differential (calculators can be found online, or ask your banking officer)

If the interest rate is higher, many places will waive any penalty since they are happy you're staying on board.

An option you have to avoid penalties is to choose to "blend and extend" your mortgage - essentially it prorates and combines the interest (old and new) and extends the terms to come up with a new interest rate with no penalties.

Things get very math-geeky beyond that, so if you want more details, you'll have to get more specific with the numbers. Your banking officer / mortgage rep should be able to give you exact numbers for every scenario, and then you can compare between them, or shop elsewhere if there really is no option that you like.

As I said, there are some good mortgage agents and brokers on here, and we partner with a few really great ones as well if you want to put a few "2nd opinions" together.

This post you put up is a great first step!
Author:  Kiddan [ Tue Nov 02, 2010 11:20 am ]
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There should be absolutely no reason why you should be paying the penalty if you staying with the same institution and taking on a bigger mortgage regardless of the interest rates.

In any case, you should be getting quotes from other institutions so that you can keep your bank in check as to what rates they offer you. Make them still compete for your business...

Go to the branch that your mortgage is registered with and talk to the Manager. If you have other banking with them, threaten to take all that away and tell them that if they are not willing to waive the fee then you might as well go somewhere else.

If you are with RBC, ask them about their homeline plan where you can keep your current mortgage the way it is and then add on the new portion as a separate amount.
Author:  christinajackson [ Tue Nov 02, 2010 12:42 pm ]
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Not sure with all lenders but general policies with TD are...

- if your penalty is a 3 mths interest charge and you are taking a 'replacement' mortgage ( a new mortgage that is =/> in amount) then the 3 mths interest charge is reimbursed (this is our 'mortgage replacement' policy)

- if your penalty is an IRD (Interest Rate Differential) and you broke the term (even if you replace the mortgage) you would not be reimbursed. Most clients in this situation choose to 'port' the mortgage to avoid the pre-payment charge. The IRD is a true loss to the bank and hence the reason they do not waive this charge.

I assume most 'A' lenders have similar policies....

If anyone ever needs to discuss a specific scenerio you know who to call. (me :wink: )
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