Mortgage rate review
Sarah & Tom Nguyen (HELOC)
5-yr variable · renews —
F
1.80% above market
Current rate 6.95% vs. today's 5.15% (5-yr variable)
Current rate
6.95%
Today's market
5.15%
Mortgage balance
$60,000
Payment now
$418/mo
At market rate
$354/mo
Potential saving
$64/mo
If they broke and switched today
penalty: 3-month interestPenalty + fees
$2,543
Monthly saving
$64/mo
Break-even
40 mo
Net over term
—
Costs paid out of pocket
New payment $354/mo on $60,000 — $1,043 penalty + ~$1,500 fees paid up front.
Costs financed into the mortgage
New payment $369/mo on a new mortgage of $62,543 — saves $49/mo, nothing up front.
Saves about $64/mo; the penalty and fees are earned back in roughly 40 months. Add a renewal date to weigh it against the time left.
Recommended next step
About 1.80% above today's market — switching could save roughly $64/mo. Worth weighing any prepayment penalty against the savings.
Payment estimates assume a 25-year amortization with Canadian semi-annual compounding. Penalty ≈$1,043 estimated by the 3-month interest method — Variable terms almost always break at three months' interest. Fees assume ~$1,500 legal/appraisal — often lender-covered on a straight switch. Confirm exact figures with the lender. Illustration only — not a mortgage approval or financial advice.
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