Are you thinking about refinancing your mortgage in Canada? One important factor to consider is the legal fees associated with the process.
Today, we’ll go over what the fees are, why they are necessary, and how much you can expect to pay when refinancing your mortgage.
By understanding these costs upfront, you can make an informed decision and be prepared for what to expect during the refinancing process.
An Overview Of Legal Fees In Refinancing A Mortgage In Canada
|Mortgage Breakage Penalty
1. Three months’ interest
2. The interest rate differential (IRD)
|Mortgage Discharge Fee
|Appraisal And Inspection Fees
|Mortgage Registration Fee
Mortgage Breakage Penalty
A mortgage breakage penalty is a fee that a borrower has to pay if they want to break or terminate their mortgage contract before it reaches the end of its term. This penalty compensates the lender for any losses they may incur as a result of the borrower breaking the contract.
In Canada, mortgage prepayment penalties are calculated as the greater of:
- Three months’ interest
- The interest rate differential (IRD)
Mortgage Discharge Fee
If you’re moving to a different lender, you’ll need to have your mortgage discharged. Depending on the province, the cost might be anywhere from $200 to $350. If you are staying with your current lender, you do not need to pay a mortgage discharge fee.
Appraisal And Inspection Fees
Your lender will need to know the current market value of your house. The most a lender is likely to let you borrow is 80% of your home’s worth, based on an appraisal. In most cases, you may expect to pay between $300 and $600 for a property assessment.
Mortgage Registration Fee
A mortgage registration fee is required as part of the refinancing process, whether you stay with your current lender or switch to a new one. This fee is charged by the government and covers the costs of removing the current mortgage from the title on your property and registering a new mortgage amount. The amount of the fee is approximately $70.
If you want to refinance your mortgage, you’ll need the help of a real estate attorney who can handle the necessary paperwork. For a mortgage refinancing, you should expect to pay between $750 and $1,500 in legal fees.
Legal fees are an important consideration when refinancing your mortgage in Canada. These fees are necessary to ensure the legal processes are carried out properly and to protect your interests. While the exact cost can vary depending on your specific situation, you can expect to pay several hundred dollars in fees.
If you’re considering refinancing your mortgage, it’s a good idea to speak with a mortgage broker who can help you understand the costs and guide you through the process. A mortgage broker can also help you find the best rates and terms to meet your needs. Don’t let legal fees be a deterrent – contact Premiere Mortgage Centre today to learn more. Click here.