Variable Rates Lower than Last Year, Should you Refinance ?
If you signed a variable rate mortgage in the past year, it may be time to refinance again.
Many individuals who came up for renewal in the past year may have selected a variable rate as high as prime + 1%.
Look at this example of a client who is paying prime + .5% on a $300,000 mortgage:
Mortgage = $300,000
Penalty to get out of the mortgage = $2,062
Savings of .5% in 5 years in the new mortgage = $7,038 (assuming a prime rate of 2.25% and an amortization of 25 years).
Net savings in 5 years after penalty = $4,976
That’s a pretty nice trip to Disneyland for your family at the end of your term to celebrate lower interest rates!
Call your banker or mortgage broker for further info.
