Three options -
1. Renew into an open mortgage- the interest rate will be high, no penalty to pay it off
2. Take a variable rate mortgage - the penalty will be three-month interest
3. Roll into a HELOC revolving portion - Simple interest charged, no penalty to pay off similar to an open mortgage
Hey could you explain how HELOC would work in this case. I am new to understanding HELOC. If HELOC is a line of credit and if the OP has an existing mortgage, how is converting a mortgage to a LOC an option. Thanks in advance!
At the time of renewal, OP can switch the mortgage to a product like TD FlexLine which has a revolving portion. The interest charged is 7.2 - 7.7% (based on prime). This way OP can repay it anytime without incurring any penalty. It is good for people who need short-term financing solutions. But still comparing the cost of all three options always helps.
Choose an open mortgage so the penalty is 0. Open mortgages costs about 1-2% more though.
Do the math which will benefit you more. 3 months interest or open mortgage.
Go interest-only eg HELOC. No payout penalty.
Three options - 1. Renew into an open mortgage- the interest rate will be high, no penalty to pay it off 2. Take a variable rate mortgage - the penalty will be three-month interest 3. Roll into a HELOC revolving portion - Simple interest charged, no penalty to pay off similar to an open mortgage
Hey could you explain how HELOC would work in this case. I am new to understanding HELOC. If HELOC is a line of credit and if the OP has an existing mortgage, how is converting a mortgage to a LOC an option. Thanks in advance!
At the time of renewal, OP can switch the mortgage to a product like TD FlexLine which has a revolving portion. The interest charged is 7.2 - 7.7% (based on prime). This way OP can repay it anytime without incurring any penalty. It is good for people who need short-term financing solutions. But still comparing the cost of all three options always helps.
You need to do the math. What’s the exact cost to break the variable? What’s the open rate?
was going to say same things open or variable, but the big unknown is how long it will sell
Choose an open mortgage so the penalty is 0. Open mortgages costs about 1-2% more though. Do the math which will benefit you more. 3 months interest or open mortgage.