On Tue, 2 Mar 2021 06:24:23 -0800 (PST), trader_4
wrote:

On Tuesday, March 2, 2021 at 12:44:39 AM UTC-5, wrote:
On Mon, 1 Mar 2021 23:07:18 -0500, Ralph Mowery
wrote:

In article ,
says...

On the other hand, those who got variable rates in 1992 when they
were starting at 9.25%, made out quite well as they quickly dropped
to 7 and later 5%.



When the rates drop one can usually negociate for the lower rates even
on fixed rates, or go to another bank (lender).
You'd need to buy your way out of the mortgage - the penalty
is usually the interest they are losing plus a fee for the
trouble.
John T.

Is that how it works in Canada? Not here in the US. I've never seen a mortgage
with a pre-payment penalty at all and I would bet that it's probably illegal in many
states. I've refinanced many times with no penalty. The only costs are whatever
it takes to get the new mortgage, eg application fee, appraisal fee, misc fee, etc.

They do it, particularly when rates are really high. I had to shop to
get one that didn't have the early payment penalty in the 70s. They
also did not want to let you pay down the principal early. I was
fortunate to know a person in the Riggs Mortgage Department (my MIL at
the time) who looked over my contracts before I signed and marked them
up as to how I wanted them to read before I would sign. We found
someone who wanted the business enough to go in their drawer and get
the contract I wanted. They usually have them, it is just not their
first offer. I suspect a contract with a fixed payment schedule is
easier to sell.
That was my condo. I refinanced twice and paid down the principal
every time I had a few extra bucks. An original 30 year note was paid
off in less than 10. The last 15 year mortgage I had was actually a
smaller payment than the original 30 year. I was doubling up on them
most months. That went real fast.