A mid term transfer or switch is an excellent way for mortgage holders to take advantage of lower rates.  They can switch their existing fixed term mortgage, lock in a higher variable rate mortgage into a lower fixed rate or switch their mortgage into a home equity line of credit product.


A mid term transfer can save an existing mortgage holder $1000s of dollars.  However it is really important to understand what the terms of your existing mortgage are.   A transfer or switch means that the client will be transferring the mortgage as is with out making any changes to the amount  or amortization.

Is it even possible to transfer the existing mortgage?  Some lenders products will not allow a mid term transfer.  These no-frills mortgages sometimes are not transferrable until the end of the mortgage term.   It is important to make sure that the existing mortgage isn’t restricted.

What is the penalty to break the existing mortgage?  As current mortgage interest rates decrease, it’s likely that your mortgage penalty will increase.  Different lenders have different penalty calculations.  It is important to get the penalty estimate from your current lender.  We can then calculate if it is in your best interest.

What are the costs involved to transfer the mortgage?  Almost all lenders will pay for all transfer and legal costs for the transfer.  The legal paperwork is usually handled by FCT or FNF which are title companies that do the legal work on behalf of the lender.  The cost savings to the client is approximately $800.00.  The lender will also pay of any provincial discharge fees.  If an appraisal is required, Peter Paley & Associate will reimburse your for this fee upon your mortgage funding (approximately $325.00-$400.00).   It is also important to know if your existing mortgage is registered as a “collateral” mortgage or a “standard” mortgage at the land titles office.  Collateral  mortgage charges are more difficult to transfer and can result in the client having to pay new legal fees to re-register the mortgage.

Who pays the early payout penalty at the existing lender?  Unfortunately, this is a borrower expense.  However, we can include/capitalize up to $3,000.00 in the new mortgage at the new lender.  Any amount over and above $3,000.00 will be the client’s expense.

We would be happy to explain your options if you contact us today!

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