Quote:
Originally Posted by GP_Matt
Most banks will let you "blend and extend" if you want to renew your mortgage early and it shouldn't carry a penalty. Essentially they figure out a new rate that is lower than your current rate but not as low as the rates currently offered and then set it as a new 5 year term. Negotiating this rate would be a pain though because of the math involved.
They do it if you have a few years on your mortgage but want to take advantage of lower rates so I am sure they would allow you to roll the HELOC in at the same time.
|
Often they'll just work the penalty into the new rate.
So if you have 5%
Current rate is 3%
Blended rate let's say is 4%
They'll give you 4.1864% and you've just paid the penalty via rate. All it really does is lower your risk that you're going to renew in a higher rate environment. Often you're better hanging on or paying the penalty and moving on because a broker might get you a better overall rate. The 3% they're blending it with might also be higher than their best rate.