Quote:
Originally Posted by CaptainYooh
Well, yes and no. Big banks "buy" consumer mortgages, then package and sell them to other financial institutions making money on spreads and fees.
In US - consumers get a 30-yr fixed rate mortgage on a house which can be paid out anytime without a penalty. So, pre-payment penalties are not a common necessary evil.
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It seems that in the US, the fees are all up front and a lot of the line items are pretty much made up and can vary from 0 to over $10,000, with lower interest loans usually having higher fees and points. So, re-financing only makes sense if you are going to save enough to cover those fees again. Basically, we pay our pre-payment penalty up front.