Thinking about refinancing, prepaying a large amount or renegotiating your current mortgage to take advantage of lower interest rates? Before you do, there are several things to keep in mind—the most important one being whether or not you will have to pay the mortgage pre-payment charge.
The purpose of a prepayment charge is to compensate the lender for the economic costs it incurs when a prepayment amount exceeds the prepayment privileges permitted under the mortgage.
The best way to know whether you can still save money in the long run after paying the mortgage pre-payment charge is to visit your RBC branch and talk with us.
Our "Mortgage Prepayment Charge Calculator" can also help you determine how much it could cost to break your mortgage. If you have a fixed rate closed mortgage, our calculator can help you determine what interest rate you would need to get in order to "break even."
To learn more about breaking your mortgage and mortgage pre-payment charges, see Renegotiating Your Mortgage Agreement, Financial Consumer Agency of Canada
With interest rates at historical lows, you may be thinking about renegotiating your mortgage rate to take advantage of lower rates. However, if you break your closed term mortgage, you will be assessed a prepayment charge.
Understand your options and find answers to frequently asked questions such as: