Saturday, May 16, 2009

To Refinance or Not?

I will be the first to admit, that I have been a very irresponsible blogger this week. No post since Tuesday (and I actually wrote it Monday). Geez!

I have reasons though, and I think they are good ones! First, this week turned out to be insanely busy. We wrapped up Brownies and I went to my info night for rowing (that will be a rant for another day). I talked with my mortgage broker and met with a realtor, and I also went on a date (!! Pretty uneventful so not much to share even if this were THAT kind of blog)

I have spent a lot of time with my variable-rate-mortgage friends lately, and after hearing about their 3.25% rate for the umpteenth (I think that is a word that should only be said, not written), I was more than a little envious. My 5.76% rate doesn't look so hot, in comparison, so I called my broker this week to see what we could do about it. With prime below 2.5%, in some cases there is more merit in paying the penalty and getting the low rate.

Turns out, I am not one of these cases. Since I took a 5 year fixed rate, I am locked in for another 3 1/2 years (approximately), so I have not paid off enough of my mortgage (and therefore "own" enough) of it yet to justify the penalty. Also, since my rate is quite a bit higher than today's interest rates, the difference in lost interest to ING (yes, I have an "unmortgage") is pretty substantial. When it is all said and done, it would cost me $12,000 to payout my current mortgage. YIKES!

The good news I got this week? I don't have to upgrade my electrical right away!! This is something I have worried and thought about since I moved in. My neighbour and I got together with a realtor she knows one evening for a couple of drinks, and I asked him some questions about the value of upgrades, in terms of resale. I was also pleased to hear that the curb appeal of my house is great. Maybe it has become so familiar to me, I think it's blah? I am also going to hold off paving my driveway for now. It was extra exciting to hear that I can focus my energy (and finances) on finishing my basement and the little things inside my house!! Pink, striped office, here we come!

Have a safe and happy long weekend!


  1. Cheers to being envious of the variable-rate crowd! I'm in your shoes and also went to visit my broker last week. I'm thinking of paying the penalty (mine's over $18,000), now it's just to decide on going variable or negotiating a low enough rate to at minimum break even, and hopefully save a couple grand.
    Great blog by the way!

  2. Ah the variable rate, soooo good sometimes (like right now!). But I have to say it is not for me, I would worry way too much about changing rates and not knowing enough to make the best decisions.

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  4. JamsWife - I think I am also too conservative to stay with a variable rate. I am trying to console myself in that my rate is only 5.76, since there are probably a lot higher rates out there! Thanks for the comments!

    Thanks for the nod, K. $18,000???!! wow.. Good for you for making that move! Good luck with the decision!

    Keep them coming, and pass me along to your friends! :)