Mortgage Payout!!! [Old Thread- new questions]

[CrazyCaper]

WOOHOO!!
Looks like I found a loophole in my mortgage payout penalty. According to my clause, since my current mortgage is insured through CMHC, I have the option of paying out a 3 month interest penalty since I have completed 3yrs of my 5yr mortgage term. It took some digging on my part but it's gonna save me around $15k. I'm surprised no one else has run into this predicament before.

[onetwo_threefour]

Originally Posted by CrazyCaper

WOOHOO!!
Looks like I found a loophole in my mortgage payout penalty. According to my clause, since my current mortgage is insured through CMHC, I have the option of paying out a 3 month interest penalty since I have completed 3yrs of my 5yr mortgage term. It took some digging on my part but it's gonna save me around $15k. I'm surprised no one else has run into this predicament before.

Good for you! I have heard something like this before. It's always good to go back and read the fine print.

[albertGQ]

Originally Posted by CrazyCaper

WOOHOO!!
Looks like I found a loophole in my mortgage payout penalty. According to my clause, since my current mortgage is insured through CMHC, I have the option of paying out a 3 month interest penalty since I have completed 3yrs of my 5yr mortgage term. It took some digging on my part but it's gonna save me around $15k. I'm surprised no one else has run into this predicament before.

I wonder if I had that clause in my mortgage as well

[algernon]

Originally Posted by albertGQ

I wonder if I had that clause in my mortgage as well

So you paid out?

[albertGQ]

Originally Posted by algernon

So you paid out?

No. I was at ATB so I blended my 5.60 rate with their promotional 3.50 they had last summer

Ended up with a 4.55% rate. Not the best, but much better then 5.60

[Clarkey]

Originally Posted by CrazyCaper

WOOHOO!!
Looks like I found a loophole in my mortgage payout penalty. According to my clause, since my current mortgage is insured through CMHC, I have the option of paying out a 3 month interest penalty since I have completed 3yrs of my 5yr mortgage term. It took some digging on my part but it's gonna save me around $15k. I'm surprised no one else has run into this predicament before.

Is this a general CMHC clause or does it state it specifically in your contract?

I did some reading and it appears that this CMHC clause was optional after 1999. My agreement does not mention it, so although I only have 2 years remaining on my 5 yr term I may be SOL.

[CrazyCaper]

Originally Posted by Clarkey

Is this a general CMHC clause or does it state it specifically in your contract?

I did some reading and it appears that this CMHC clause was optional after 1999. My agreement does not mention it, so although I only have 2 years remaining on my 5 yr term I may be SOL.

This was stated specifically in my contract. A friend of mine show me his contract with TD and it did not have this payout option included.

[Clarkey]

Originally Posted by CrazyCaper

This was stated specifically in my contract. A friend of mine show me his contract with TD and it did not have this payout option included.

I'm thinking that's rare. It appears that after 1999 CMHC no longer mandated this term. You either had a good mortgage broker helping you out, or got lucky!

[CrazyCaper]

Update.
I have finally settled with my previous mortgage holder regarding my payout penalty. The original amount that I was quoted was just over $18K. The amount settled upon was just over $3600.

I've decided to spend the excess funds on hookers and blow to celebrate.

WHO'S IN??

[photon]

So we're selling one of our properties, do you have to worry about payouts when you are selling?

In my case it doesn't matter because the mortgage is open, but just wondering.

[onetwo_threefour]

Originally Posted by photon

So we're selling one of our properties, do you have to worry about payouts when you are selling?

In my case it doesn't matter because the mortgage is open, but just wondering.

Absolutely, that's by far the more common time we see penalties.

That's why banks have portability policies. If you want to sell your house and buy another, you can transfer the remainder of your balance and term to the new property at your existing rate without paying a penalty for breaking the mortgage if your bank allows porting and you have a closed mortgage.

[photon]

Oi, something to watch out for then. I haven't sold a property for a looong time lol.

Man good thing this mortgage is open.