Today’s question is “Should I break my existing mortgage if my current interest rate is lower than the new one being offered?”
That’s a great question!
This is happening more and more in our current rising interest rate environment.
The best answer is to do the numbers.
In some cases, it does make sense to break your mortgage, even at a higher interest rate, so that you can consolidate your other debts and decrease your cash outflow. This can help you make sure you have more money left than month (you know what I mean!).
The other option is to get a second mortgage.
This would allow you to keep that good existing interest rate and take out another mortgage behind it. The second mortgage may be at a higher interest rate, but again, depending on your goals and if the cash flow makes sense, it can be a great alternative.
Thank you for the great question and for watching today’s Monday Mailbag!
Don’t forget to contact your local Hamilton Mortgage Agent if you have questions about your mortgage or interest rate and as always, have a great day!