Real Estate

How much will I save? 5 year fixed: 2.72% vs 1.79%

  • Last Updated:
  • Sep 2nd, 2020 5:58 am
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[OP]
Deal Addict
Apr 18, 2013
3332 posts
1417 upvotes
Canada
fogetmylogin wrote: Did I miss something? How much time is left on your current 5 year mortgage? If your penalty is only $2700 it doesn't sound like it's the full five years (or minus a few months). This changes your calculations in two ways. Remaining interest of course but also on the other end. If you have 2 years left for example you are very likely to get a very similar rate as now in 2 years whereas 5 years from now it is less known.
It's 5 months into a 5 year fixed term at 2.72%.
Deal Addict
May 4, 2014
4552 posts
5445 upvotes
Toronto, ON
gbill2004 wrote: It's 5 months into a 5 year fixed term at 2.72%.
Pretty sure your penalty isn't just $2700 if its a 5yr fixed.. you must be thinking it's just 3 months interest, when you'll actually be charged the interest rate differential which will pretty much negate any savings.
[OP]
Deal Addict
Apr 18, 2013
3332 posts
1417 upvotes
Canada
er34er34 wrote: Pretty sure your penalty isn't just $2700 if its a 5yr fixed.. you must be thinking it's just 3 months interest, when you'll actually be charged the interest rate differential which will pretty much negate any savings.
3 months interest is $1440. I got the IRD penalty in writing and it's $2701, but keep in mind that lender is doing the IRD based on 2.45%. The 1.79% is a different lender.

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