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Rates have taken a serious nose-dive since the Covid-19 pandemic crippled much of the economy.  The banks are doing their best to stimulate home purchasing with dropping the fixed rates to 1.89% in some cases.  What can you do if you're sitting at a fixed rate of 3.49%, and what does this mean in reality?

It possibly means that refinancing could save you up to $13,000 in a 5 year period!  That's a LOT of money to leave on the table, or in the bank.

There are a few things to consider when you're thinking of chasing down that low low mortgage rate:

1) What's your penalty for leaving your current mortgage?  There's always a cost to breaking your mortgage early.  You will need to know how much in order to see if the savings would outweigh the cost.  This penalty will be determined by your rate, Variable or Fixed, and time your mortgage matures, (comes up for renewal) and other details.

2) When is your maturity date?  Generally speaking, the penalty is higher closer to the start of your mortgage, than nearer the end of your maturity and close to the renewal date.  Within approximately 18 months to 2 years, is a "sweet spot" for leaving a mortgage early, as the costs may not be as high at that time.

3) What is your current rate? If you're jumping from 2.14% to 1.89% you'll see a savings on your monthly payments. But the amount may possibly not outweigh the cost of getting there.  

It may not always be in your best interest to jump, so you should speak to your mortgage broker if you are thinking of chasing down these tempting rates.  You could be saving thousands, or it could cost you as much! Which is why we are here to give you the most information to make an educated decision.