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Originally Posted by Liquid_o2
Wondering if you guys can provide some advice.
Our condo is up for mortgage renewal in November of this year. Coming to the point where we can break the mortgage with limited penalty.
We are hoping to find something bigger in the next year or two (if we can actually find anything in our price range of course). Should we be locking in a fixed rate for another 5 years with a clause that we can transfer the mortgage and rate over to a new property? Or should we be going variable as it provides more flexibility if we move?
I'll be talking to my mortgage broker soon, but I want to be better informed.
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Almost all banks allow mortgage porting but ask in your case. If it's an open mortgage usually it'll be 3 months interest penalty if it's closed it'll be interest rate differential (IRD) which will take the difference of your contract rate and the current market rate multiply by your remaining term. IRD is the one you want to avoid. It can be a few thousand to $10k+. All depends on the market rate at the time you're breaking. Keep in mind BOC is already warning interest rate increase possibly by summer.
Quote:
Originally Posted by Gerbs
Does anyone actually know the rough estimate for the income you need and estimated HELOC you would be approved for? I asked a few lenders and it seems really vague without having to put in a full application with a credit check.
What would happen in this scenario?
$500K Place, 20% Downpayment
$400K Loan, $80,000 income to qualify with no debt.
2 years later
$600K Valuation
$370K Loan, $230K in equity
What's the HELOC loan range if income increased to $120,000 vs stayed at $80,000?
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There's more to the calculation than that. They use what's called Total Debt Service Ratio (tdsr) which includes all major payments you have on top of your existing first mortgage. Then there's credit score, how much credit you're carrying, how much credit you owe, etc. This is used on all 2nd ,3rd, etc mortgages also known as equitable mortgage. Basically any type of mortgage that's secured by property equity. In order for you to know what you can pull unfortunately would have to submit application/credit check