We’re living in the time of low interest rates. They’re at historic lows, and while no one is sure how low they’ll go – or when they’ll inevitably start to rise – now is the time for you to take advantage of the current mortgage rates and save yourself some cash in the long run. But if you’re in the middle of your mortgage term, refinancing your mortgage in order to get a lower interest rate than what you’re currently paying can mean paying some pretty hefty penalties. Here are some ways to know whether or not your interest rates are too high and whether it’s worth breaking your mortgage to take advantage of best mortgage rates today.
  1. Your credit has improved since you first got your mortgage
Your credit report and score are one of the most important factors that a lender looks at when determining your suitability as a borrower for a mortgage. The better a candidate you are, the more attractive interest rates that you get. If your credit was only so-so when you got your mortgage but you’re a few years into your repayments and your credit has improved since then, you can almost certainly get a better rate than what you’re currently paying.
  1. You haven’t reviewed your home loan in the past 5 years.
Depending on the length of your current term, you may not have given your loan parameters much thought since you got your mortgage. But even if your financial situation hasn’t changed at all, your mortgage interest rate could be too high. If you’re paying a much higher interest rate than today’s historic lows, then in some instances, you could end up ahead in the long run, even if you have to pay penalties.
  1. You have more flexibility in your monthly budget
If you don’t need as much stability as you did when you obtained your mortgage, then you can consider getting a different mortgage option with lower rates. This may be because your income has increased and/or you’re able to withstand a little more uncertainty so you no longer need the safety net of a fixed rate. While variable rate mortgages are typically lower than fixed rate mortgages, the better bet these days the difference a short-term fixed rate mortgage. Depending on where you are, the difference in a 1-year fixed rate mortgage and a 6-year fixed rate mortgage can be more than 1.5%.
Whatever you decide, don’t go it alone. Contact your mortgage broker to discuss your high mortgage interest rate; you may have more options than you think.


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