After a series interest rate cuts since the Coronavirus Pandemic started, the Bank of Canada helped make mortgage rates drop to record low. These new extremely low mortgage rates make it more appealing for homeowners to refinance their current mortgages, and even take out additional cash from their home equity to help offset income loss during the COVID-19 crisis.
With rates as low as 2.29% for a 2-year insured fixed mortgage, mortgage refinancing in Toronto and the surrounding areas has increased substantially since the COVID pandemic started. Now is a great time for homeowners to refinance their mortgages of add a HELOC (Home Equity Line of Credit) in order to get lower rates or lower monthly payments, consolidate debt, or take out equity from their homes in order to help with other expenses, investments, renovations, and more.
Before refinancing your mortgage you should do the calculations to make sure that you will in fact be putting yourself in a better financial position after the refinance. Your Clover Mortgage broker can help you understand the potential cost savings and any mortgage prepayment penalties that might come along with breaking your existing mortgage early.
Typically early prepayment penalties on a variable rate mortgage is 3 months worth of interest, and with a fixed-rate mortgage the penalty is usually the greater of either 3 months of interest or the interest rate differential (IRD). Again, your mortgage broker will be able to calculate that penalty for you and help you understand if it makes financial sense for you to refinance now.
Even if you don’t have great credit, or if your credit score is really low, you might still be able to qualify for a mortgage refinance with bad credit or second mortgage if you need the extra money.
Call or text us today at 416-674-6222 or toll free at 1-800-673-2230, or email us at email@example.com to speak with a licenced and experienced mortgage broker who specializes in home mortgage refinancing. Our licenced mortgage agents and mortgage brokers will be able to answer all of your questions and help you determine if refinancing your mortgage is the right choice for you.