Roughly one year about the fixed mortgage rates for a 5 year AAA client were 2.04%. Now the rates for the same term is 4.59%. While much higher thank last year it has come down in the past few weeks from it’s peak of 5.09% back in June.
Let’s say that you were one of the lucky ones who got a fixed rate mortgage last year with a rate of 2.04%, 25 year amortization and 300K mortgage balance with a payment of 1276.15. Most of the lenders I deal with have excellent pre payment privileges, from putting an extra 15 to 20% of your principal directly on your mortgage once per year or doubling up your payments.
Since not many would have an extra 45-60K just lying around to put directly on your principal but you’re doing well this year and as a result want to take advantage of the double up feature. Everything on and above your prescribed mortgage payment of 1276.15 which is a mix of interest & principal will go directly to paying down the principal. So by doubling up your payments, you will pay off your mortgage 14 years early and have it paid off just over 11 years instead of 25. Just something to think about if you are lucky enough to have a low fixed rate mortgage.
Today I am thankful for a nice 50K bike ride with friends this morning, because of an early start I was back early enough to get some work done and new gears on my bike made it much faster.
I look forward to hearing from you in regard to your mortgage needs.
p.s.s- I should tell you that I am licensed in Nova Scotia Brokerage (2021-3000179) Broker (2021-3000180), Ontario(M18001555) & in British Columbia(BCFSA #504098).
p.s.s.s You can download my new mortgage app here