Is your mortgage due for renewal in 2023?

Will your mortgage payments DOUBLE in today’s rate environment.

2018;

Let’s assume in 2018 you secured a $500,000 mortgage with a 5 year fixed rate of 3.54% on a 30 year amortization

Your monthly mortgage payment would be

$2,249.18/mth.

Fast forward to today, 2023. Assuming you only made the regularly scheduled monthly mortgage payments and NO pre payments to pay down the balance during the 5 year term. 

The outstanding mortgage balance at renewal would be $448,594 with 25 years remaining on your amortization.

Let’s use a current 5 year fixed rate of 5.24% as the renewal offer today

$448,594 = new mortgage balance at renewal 

5.24% = 5 year fixed rate 

25 year amortization 

$2,670.67 = New Monthly Mortgage Payment.

Side by Side:

2018

$500,000 mortgage 

3.54% 5 Year Fixed

30 year amortization 

$2,249.18

2023

$448,594 mortgage 

5.24% 5 year fixed 

25 year amortization 

$2,670.67

$421.49 increase to the mortgage payment at renewal.

Want to go back to your original 30 year amortization?

Let’s see what the numbers look like if you qualify at today’s stress test rate of 7.34%

$448,594 mortgage 

5.34% 5 year fixed rate

30 year amortization 

$2,485.92

$236.74 increase to the mortgage payment at renewal.

Summary:

2018 - Original Mortgage

$500,000 mortgage 

3.54% 5 Year Fixed

30 year amortization 

$2,249.18

2023 - Renewal 25 Year Amortization

$448,594 mortgage 

5.24% 5 year fixed 

25 year amortization 

$2,670.67

2023 - Refinance 30 Year Amortization 

$448,594 mortgage 

5.34% 5 year fixed 

30 year amortization 

$2,485.92

PRO TIP: Always take advantage of your pre payment privileges and PAY DOWN YOUR PRINCIPAL