If you are currently tied to a mortgage for several more years, you might feel trapped. Whether considering refinancing, mortgage transfer, or even early renewal, you could face substantial financial penalties, sometimes amounting to several thousand dollars. However, there are methods to mitigate these constraints.

Discover below clever strategies tailored to various situations. Additionally, remember that the mortgage brokers at Planiprêt are at your disposal to advise and guide you towards the most advantageous solution for you!

Maximize prepayments outlined in your mortgage contract

Examine the terms of your current mortgage contract to better understand the prepayments you are allowed. Typically, your lender permits prepayments without penalty up to a certain percentage, often between 10% and 25%. Before breaking your contract, take advantage of this option to reduce the penalty cost. If you're nearing your loan's anniversary, waiting a bit could be wise, allowing you to make two prepayments without extra charges. Make sure to inquire about this opportunity, as your financial institution is unlikely to offer it on their own!

Transfer your mortgage to your new property

Check if your current mortgage contract includes a transferability clause. This clause provides you the option to transfer your mortgage to your new property. The bank may require a review of your record to ensure everything is in order. If your contract doesn't include this clause, don't hesitate to negotiate with your lender. Explore this option with determination!

Transfer your mortgage to the new buyer of your property

Subject to your lender's and the buyer's approval, you could transfer your mortgage as-is to the new owner. However, remember that you remain responsible for the loan. Evaluate the situation carefully before making such a decision.

Consider a blended rate

This solution could apply in two scenarios: when you need refinancing for property improvements. In both cases, a penalty will need to be paid, but it can be integrated into a blended rate. Generally, banks agree to a refinancing with a blended rate for a new 5-year period. Sometimes, it might be more advantageous to settle the penalty and negotiate an entirely new mortgage at market rates. Keep in mind that this option is at the discretion of your financial institution and could limit negotiation flexibility.

Secure your next interest rate in advance

It's usually possible to lock in your future mortgage rate 90 to 120 days before it takes effect. This simple and effective step protects you from rate increases as your loan's maturity approaches. If rates were to decrease, your broker could adjust your file downward, about 1 week before finalization with the notary.

Regardless of your situation, we strongly encourage you to seek the advice of our mortgage brokers at Planiprêt. They can assess the various alternatives available to you. Despite these tips, it's always wise to consider all options. Our mortgage brokers are capable of securing extremely favorable negotiation rates for you. Even factoring in penalties, a mortgage transfer could very well be a valid option. It just takes a thorough analysis of your choices, and we'd be delighted to do it for you!