Hello Mariah, there often will be a penalty to break your mortgage with the lender you are with. Unless you have an open mortgage which does not carry a penalty to break. If you are not sure if you have an open mortgage or closed mortgage, chances are you are in a closed mortgage. (Open mortgages have higher interest rates and are not often offered by lenders unless the client specifically asks for them due to the chances of breaking the mortgage) The exact calculations vary from lender to lender and are spelled out in the terms of the mortgage agreement you received when you set up your mortgage to begin with. The basics are as follows. For a variable rate mortgage you will most likely be charged 3 months interest penalty (The next 3 months interest due on your mortgage payments basically). If you have a fixed mortgage rate then things get tricky. You will be charged 3 months interest penalty or Interest Rate Differential (IRD). The first is the same as before but IRD is a whole different animal. It can get quite costly and is designed to prohibit movement of the mortgage to another lender due to a better rate environment. If the rates in the marketplace are higher than the rate you currently have on your mortgage you will be most likely charged the 3 month penalty. If the rate environment is such that rates are lower than what you have currently the IRD is often charged. The IRD calculates how much money you will save at today`s rates on your current mortgage balance and remaining term and charges you roughly that amount to break. In this way clients don`t jump ship when the rates get better. The calculations are not perfect however and many of my clients have broken their mortgage and taken it to another bank even though they are not selling or moving. Just how much you save varies on your specific mortgage and the rates available. Only specific calculations to your current mortgage situation can tell you if it makes sense for you. I hope this information has been helpful Mariah, I would be happy to do some calculations for you or any reader, no obligations. Please do not hesitate to call. Abraham Niyazi - Mortgage Agent - Lic#M08010640 - Centum One FInancial Corp - Lic 10758. Cell: 416-993-4082 Toll Free: 1-866-728-3708 x 115 www.centum.ca/abraham_niyazi/ I deal with 25 Lenders/Banks and can do mortgages across Canada except Quebec.

Yes, there is a penalty to break your mortgage before term is up. However there is no penalty for selling your home. You can sell your home and move to another one, then you can port your mortgage to the new property and avoid the high penalty for breaking the mortgage.

When you want to break your current fixed mortgage before the term is up, you will pay a penalty to the bank which is 3 month interest if the current market mortgage rate is higher then your or IRD formula will be used to calculate a penalty if your mortgage rate is higher then the current posted rate.

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Wachovia bought world savings who i refi'd with ... the terms of my loan were different than what i was promised. when i figured this out it was too late to fight ws because wachovia had taken them over. wachovia has used many tactics to not discuss my mortgage being modified.... they told me im listed as a man on my loan document. im a chick with a girly name and girly voice. i faxed in my dl three times and they claimed never to have received it. i was put into a neg amt plan that i never ever wouldve signed up for. instead of modifying my loan wachovia screwed around and added more interest and penalties... i decided to just sell my house and pay them off. my house has been for sale for 6 months. finally im facing foreclosure. i told wachovia that i had an offer on my house but needed to know my payoff. they said they had to mail it to me and would take 7 biz days... the offer on my place fell thru because i didtn know my payoff amt and couldnt make a counter offer for fear id be losing too much when i sell. now once again i have a great offer and wachovia is pulling same crap. how do i figure out my payoff amount ? they have filed foreclosure against me even though i told them repteadly i just wanted to sell my house and pay them off!!! now i have to wokr in their insane legal fees.... help!

Mention RESPA to them, tell whoever you talk to you want to talk to a manager. Mention respa, and that will straighten them right up. They don't want to tangle with a violation. Your payoff amount should be on your monthly statement. You don't need to know the exact amount to sell your house. When you listed it, however, your agent should have given you a form that you can fax to the loan company ...if they see something in writing they are more likely to react. Also, mention to them the new act passed by congress to help people who are having a hard time with their mortgages, sounds like you qualify. If all else fails you could talk to them about a short sale, that'll perk them up, threatening to sell it for less than you owe, and they have to "forgive" the unpaid balance. If you do that you'll have to have the proper paperwork for it. Good Luck.