In early-2007 I took out a $250 000 mortgage, IO, 25 years, AMP. It was fixed and I refixed, expiring early 2016, at 5.99%. Not good compared to current rates. A year ago I enquired about paying off the mortgage early. I was advised that the early repayment interest would be over $6000. My intention is to sell the property in 12 months, say 9 am on 1 July 2015.
In the meantime, rates are way down on 5.99%. I could stay with AMP and get a drop of about 80 basis points on the AAPR. The early repayment interest may be acceptable; I have yet to ask.
My main concern is that by 2015 the current mortgage will be eight years old, with a lower early repayment interest. The early repayment interest "clock" (for want of a better term) may start at zero with a new mortgage. So while a better rate can be obtained, I'm unsure if it's worth it for a year or so of 80 BP lower rate. Any views?
In the meantime, rates are way down on 5.99%. I could stay with AMP and get a drop of about 80 basis points on the AAPR. The early repayment interest may be acceptable; I have yet to ask.
My main concern is that by 2015 the current mortgage will be eight years old, with a lower early repayment interest. The early repayment interest "clock" (for want of a better term) may start at zero with a new mortgage. So while a better rate can be obtained, I'm unsure if it's worth it for a year or so of 80 BP lower rate. Any views?