In this episode of Get Real Wealthy Season 2, Quentin weighs out the pros and cons of staying or switching your mortgage.
Quentin says that some people think interest rates are the only thing you should look at, but terms are just as important when deciding whether you should stay or switch on a mortgage. Terms and conditions are not limited to the timeframe but also things like prepayment penalties, etc. He adds that another thing to think about is the current rate versus the new rate and what are the potential savings. You also have to look at the interest savings over the mortgage term. So it’s not just the interest savings based on the month.
He further adds that you want to know also what the mortgage balance will be at the end of the term with or without switching. This will help you make comparisons. Look at both the cost over the near term and the cost of breaking your mortgage and savings when making that comparison.
In conclusion, he says that there are a lot of factors that you need to take into consideration when you are pondering over the idea of staying or switching your mortgage.
Important Links and Resources
Quentin D’Souza is the Chief Education Officer of the Durham Real Estate Investor Club. Author of The Action Taker's Real Estate Investing Planner, The Property Management Toolbox: A How-To Guide for Ontario Real Estate Investors and Landlords, The Filling Vacancies Toolbox: A Step-By-Step Guide for Ontario Real Estate Investors and Landlords for Renting Out Residential Real Estate, and The Ultimate Wealth Strategy: Your Complete Guide to Buying, Fixing, Refinancing, and Renting Real Estate.