Mailbag: Paying Your Penalty

Mortgage-Mailbag Question:  I am in a fixed mortgage and I want to switch mortgage lenders. Are there any lenders who will pay the penalty fee for the switch? – Anonymous

Answer:  Yes. It is possible to find a broker or lender who will cover part or all of your penalty, depending on the size of your mortgage and how big the penalty is. The problem is that you'll seldom get fully discounted rates. You will most likely be upcharged on the rate so the broker or lender can compensate for the cost of paying your penalty.

You're usually better off to pay the penalty yourself and get the best rate you can. Ask your mortgage planner to compare the net benefit of each scenario to determine which option costs less.

More Stories
Average home prices rise in March 2021, says CREA
Average Home Price Hits a Record $716,828. Is Another Policy Response Coming?
Copy link