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But beyond people’s lifestyle changes, the main reason to explore the possibility of refinancing these days is the exceptionally low interest rates.
“Just to put it into perspective, in January 2020 market rates were around 2.99 per cent for five-year fixed, whereas within a year the rates have almost been reduced by half,” said Luigi Iafrancesco, a mortgage specialist at National Bank. “I’ve been a mortgage specialist for five years and these are by far the lowest rates I’ve ever seen.”
The rates are so low, in fact, that in many cases they will offset the penalty incurred by breaking your mortgage term early to refinance.
“The majority of people have mortgages with rates much higher than what they can get on the current market,” said Teddy Kyres, president of Orbis Mortgage Group. “The key would be to review their penalty with a mortgage professional, and we’re finding the majority of time if you properly calculate the penalty, it is well worth it to refinance.”
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