Can you break a fixed mortgage?
You can break a fixed mortgage, but should you? It can be dangerous to break a fixed mortgage because some banks and lenders charge a break fee, which is a penalty and additional cost for breaking a fixed-interest mortgage.
As soon as you sign the contract agreeing to pay the fixed-interest mortgage loan, you agree to the terms and the conditions in the agreement. Sometimes, a bank or lender will write a clause that if you break the fixed-interest rate mortgage, you will be subject to that fine.
The fine has two parts. The first part is a general fee, and it is typically the smaller of the two. On average, it is about $1,200, but it can be as low as $50, while some lenders do not charge this fee at all.
The second part of the break cost or fee is what costs the most. It is the leftover interest rate on the leftover mortgage. There is a big calculation to find the exact amount you can owe to your lender. If you are not sure, use a free online calculator to find the break cost of a mortgage.
Breaking a Fixed Mortgage Conclusion
Mortgage House understands how stressful it is to navigate the world of mortgages. There is a lot to consider and learn and even more hidden fees. Always read through your mortgage contract before signing it and agreeing to the fixed-interest rate terms. Even refinancing for a lower interest rate can lead to a high break fee.