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Thread: Using Line of Credit to pay off Mortgage

  1. #1
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    Using Line of Credit to pay off Mortgage

    Has anyone used their line of credit to pay off some of their mortgage?

    My mortgage right now is 3.85% for 5 years fixed. I've got 3 more years left of the 5 year term.

    My line of credit is prime +1. I think prime right now is 1% right?

    Can't I use my line of credit to pay off part of my mortgage?

    Does anyone have any thoughts? Pros/Cons? How can I do this safely?

    Thanks!


  2. #2
    Administrator CanadianCapitalist's Avatar
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    Prime is 3.0% right now. Prime + 1 would be 4%. Why would you want to pay more when you have a cheaper mortgage?
    Canadian Capitalist -- Helping you invest & prosper

  3. #3
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    Yes, you can. I wrote about how I did it here:

    http://www.moneyville.ca/article/980...-pay-a-penalty

    As CC noted, it doesn't make sense in your case.
    Mike Holman
    Money Smarts Blog Investing and Personal Finance

  4. #4
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    3.85% is not a terrible rate. Next time, go with variable!

  5. #5
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    Besides that, talk to your lender. Everyone is doing prime + 0.50 % now. Banks are matching, but only if you ask.

  6. #6
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    Quote Originally Posted by Jungle View Post
    Besides that, talk to your lender. Everyone is doing prime + 0.50 % now. Banks are matching, but only if you ask.

    3.5% for five yr fixed? I have yet to see it quite that low, unless you're talking 3 or 4 yr term.

  7. #7
    Senior Member Financial Cents's Avatar
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    If mortgage @ 3.85%, work on paying off mortgage vs. using LOC for mortgage @ 4%.

    CC and Mike are right, prime is @ 3% now.

    Bank of Canada lending rates are @ 1%.

    http://www.bankofcanada.ca/rates/daily-digest/
    My Own Advisor Saving and investing my way to financial freedom.

  8. #8
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    Quote Originally Posted by Jungle View Post
    Besides that, talk to your lender. Everyone is doing prime + 0.50 % now. Banks are matching, but only if you ask.
    I was told that some are at prime, but I will follow up because it sounds too good to be true.

  9. #9
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    Sorry I was talking about HELOCs. Not mortgage rates.

  10. #10
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    i got a locked in 5 year mortgage at 3.49% in October 2010.BMO ran the offer first and then TD matched the offer for us.


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