Question:

i am looking to switch my mortgage and consolidate some bills, am currently at 7.35 % and mortgage is 110,000.00 i would like to increase it to 135,000.00 house is approx valued at 180,000.00 . i am unsure of the better method of financing right now, closed 5 year or variable protected?. i am unsure of how to read the financial trend and what is the better thing to do right now. i am not in a position to take too great a risk but would like to lower the interest being paid out on the house. thanks lisa

Answer:

You will first have to determine what the penalty is to break your existing mortgage before you start the process. I can not stress strongly enough the need to get the penalty information in writing as it may help you settle any cost disputes later. You are requesting an increase to 75% of the value of your home but I hope you are aware that you can go up to a maximum of 90% of your home's value with high ratio mortgage insurance. As to the trends in mortgage rates, they appear to be currently on the rise even though the Bank Prime has dropped a little and may drop one more time. Over the past thirty years, rates have been as high as 21.5% and as low as 4.1% for five year terms. The best 5 year rate today (April 28, 2004) is 4.9%. The best variable rate today is 3% (prime less .75%). If you would like to discuss your options in greater detail, I can be reached on my direct line at (613) 721-0010. John Lozinski

Answered By: John Lozinski

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