For most people, their monthly mortgage is their biggest expense. While a home is also an important investment and one that serves you in many ways, it\u2019s always wise to be mindful of opportunities to decrease your mortgage rate so that you can reduce the overall amount due.<\/p>\n
To secure a low rate mortgage, you may wish to refinance your mortgage<\/a>. This can help save you money over the long run. Bear in mind that before you do this, you need to understand your refinance penalty and how this may affect your potential savings.<\/p>\n The largest cost of refinancing<\/a> frequently comes in the form of your mortgage breakage penalty.<\/p>\n This is used to help the lender recover some of the lost revenue associated with the determination of your mortgage contract. Within a variable mortgage, you’d be responsible for paying three months\u2019 interest.<\/p>\n On a fixed rate mortgage, you will have to pay the interest rate differential or three months\u2019 interest, whichever is greater.<\/p>\n You may also be responsible for legal fees associated with registering a new mortgage on your home. The legal fees may be covered if the mortgage loan is between $250,000 and $300,000.<\/p>\n Consider tapping into some of your home’s equity<\/a> to consolidate debt or finance additional projects if you wish to refinance to a lower mortgage rate.<\/p>\nVariable vs. Fixed Mortgage Rates<\/h3>\n