At what point does it make sense to break you mortgage aggrement?

[pbenish]

Just a quick question.

If I have a 4 years left on my mortgage at 5.7%, at what interest rate would I be able to save money by buying out my current mortgage and setting up a new variable rate mortgage. Is this even possible?

Thanks

[Wonderdollar]

Just a quick question.

If I have a 4 years left on my mortgage at 5.7%, at what interest rate would I be able to save money by buying out my current mortgage and setting up a new variable rate mortgage. Is this even possible?

Thanks

Most of the time it is possible to break the mortgage by paying the penalty.
Having said that some financial institutions such as Home Trust etc. may not get you out of the closed mortgage if it is not a bona fide sale.

Since you have not mentioned the amount of the mortgage remaining, name of the lender and the penalty amount it would be difficult to calculate the benefit you may have. However, considering the rate difference of approx. 1.7% in your present rate and the variable rate you can get, you might be able to save on average of $1200 to $1700 in 1 year on a mortgage balance of $100,000. This is assumption only as no body can predict what the prime rate would be during this 1 year period.

Now you can calculate if it would be wise for you to pay penalty and change to variable rate.