Taking advantage of your prepayment options, even minimally, can save you serious interest while helping pay down your mortgage faster.
The portability feature can let you transfer your mortgage to a new property should you have an unplanned need to move in the middle of your term without paying the penalty. This feature can come in handy if you have a large penalty to break your mortgage or a really low rate compared to the current market, so it may be worthwhile to port your rate to your new mortgage.
While not the most sought-after feature, assumability can allow a buyer to take on the seller’s mortgage upon approval by your lender when they purchase your home. In most cases, this means no penalty for you and possibly a low rate for them if you don’t need that mortgage on your new home or are moving outside the country.
Convertibility is another valuable feature that exists on mortgages. This feature allows you to early renew your variable rate mortgage (VRM) or an adjustable-rate mortgage (ARM) at any point in your term to a fixed-rate mortgage. Depending on the lender, you may be offered different options, such as renewing to a fixed rate at the remaining term only, renewing back to a 5-year term only, or renewing to any term as long as the term remaining is not decreased.
Not all lenders will offer all these features on all their financing solutions. Some lenders will offer you features a la carte based on how you want them to price your mortgage rate. nesto makes it easy as we offer all these features on all of our mortgages, even our limited-feature mortgages.