Let’s face it there are people who like surprises and those who don’t. There are also good surprises and then there are bad surprises. Good ones include surprise birthday parties, surprise gifts, promotions and winning lotto tickets. The bad ones include but are not limited to larger than normal power bills, flat tire on your car the day or your big interview, in-laws showing up un announced and the worst one in my industry is mortgage discharge penalty surprises.
The best way to avoid these bad surprises is to be prepared. Have an account with 3 months pay for emergency expenses like your surprise power bill or your flat tire ( sorry I can’t help you with the in-laws). Now as for your mortgage discharge penalty. The best way to avoid an interest rate differential penalty is to have a variable rate mortgage as they come with only a 3 month interest penalty. In declining rate market like we have been for the last 10 years or so you are more often than not be hit with an interest rate differential penalty when going to break your fixed rate mortgage.
To lessen the blow of a whopping high penalty stay in touch with your lender leading up to a potential break of your fixed mortgage as IRD penalties will change from month to month. But as I have said if possible go variable so you can protect yourself from any potential sudden surprises when you need to break that mortgage.
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, Ontario(M18001555) & in British Columbia(BCFSA #504098).
p.s.s.s You can download my new mortgage app here