8 Dec

Original vs. New Mortgage Refinance Comparison. How can you save?


Posted by: Michael Hallett

A friend of mine recently contacted me with questions about refinaning his current mortgage. This would mean breaking his current contract and buying a lower rate. His main question, could I save money?, the answer was YES…thousands! So I have decided to show you what an average mortgage looks like with a rate purchased 3 years ago. And how much you might be able to save over the life of the fully amortized mortgage if you decreased the interest to todays rate.

Current Morgage Summary

Loan amount $325,000.00
Amortization 25 years
Loan will be paid off after 25 years
Interest rate 4.500%
Payment $1,798.79 monthly
Total of payments $539,635.36
Total interest paid $214,635.36

Penatly for terminating the current mortgage is $6,500.00. It is currently a 5 year term 3 years lapsed, 2 years remaining).

You could save $22,138.12 in interest. Over the life of your new mortgage your total interest paid will be $150,472.18 with a monthly payment of $1,509.14. Refinancing will breakeven in 26 months.

Refinance Results

Original mortgage $325,000.00
Number of payments made 36
New mortgage balance $302,268.62
Interest payments will Decrease $22,138.12
Monthly payment will Decrease $289.65
Breakeven Refinancing will breakeven in 26 months.

Refinancing will change your monthly payment for principal and interest from $1,798.79 to $1,509.14. Your new loan will be $302,268.62 at 3.500% for 25 years. Closing costs are estimated at $1,000.00 not including a $6,500.00 prepayment penalty. Additional refinancing results are summarized below.

Original vs. Refinance Comparison

  Original Mortgage New Mortgage
Mortgage amount $325,000.00 $302,268.62
Interest rate 4.500% 3.500%
Amortization in years 25 25
Monthly payment $1,798.79 $1,509.14
Interest payments $172,610.30 remaining interest $150,472.18 total interest

The results are clear…YES you can save, it this case, $22,138.12. Do you want to give that to the lender? Or put it in your bank account, invest it, renovate your home to increase the value, venture on a dream holiday…the options are endless.


1 Dec

Top Reasons Why You Should List Your Home During the Holiday Season


Posted by: Michael Hallett

  • Most December and early January buyers are serious about purchasing and likely facing some sort of deadline.
  • January is the biggest transfer month of the year and job transferee’s use the holidays to house hunt.
  • Many people want to buy before the end of the year for financial and tax reasons.  Investors usually want to close by year-end for tax purposes.
  • Homes show well when decorated for the holidays creating a sense of family and people are much more emotionally drawn to the house, emotion sells.
  • Many people take vacation around the holidays allowing more time to look for a home.
  • Remodelling, decorating, appliance installation and other services are more available and at less of a premium. Lenders aren’t as busy and can process mortgage loans faster.
  • Showings will be fewer and less intrusive, but more likely to be fruitful with motivated, qualified buyers.
  • Buyers are a bit more emotional during the holidays which can work positively in your favour.
  • Historically, there are FEWER homes for Buyers to choose from during the holidays, so those homes ON the market generally have less competition.
  • You can sell now, but specify a delayed closing or extend occupancy until January, if you so desire.
  • By selling now, you will have an opportunity to buy during the Spring, when MANY homes are on the market and price will then become more negotiable for you as the Buyer.


courtesy of Michelle Wright – thewrightmove.ca