If you're looking to switch your mortgage, Perch can automatically calculate something called your switch savings opportunity. This is the amount of money you could save (or lose) by switching your mortgage.
In the event your switch benefit is positive, it means Perch anticipates that switching your current mortgage for a new one would yield savings on your monthly mortgage payments (this number already accounts for possible costs, including break penalties for ending your term early).
If your switch benefit is zero or negative, it likely means that the penalties (including any interest left on your current mortgage) would outweigh the possible savings.
Why would my switch benefit be negative?
When you switch your mortgage, your current lender may charge a break penalty if you end your mortgage term early. This is usually the largest cost of switching and depends on your mortgage type and how much time is left in your term.
A discharge fee is different — it’s a smaller administrative cost (typically a few hundred dollars) your current lender charges to remove their claim on your property when you move to a new lender.
Does Perch cover my break penalty?
Perch does not directly cover your break penalty. However, many of the lenders we work with will help offset this cost:
Some allow the penalty to be rolled into your new mortgage balance, so you don’t pay it out of pocket.
Others provide cashback incentives that can cover part or all of the penalty.
This means that while the penalty exists, in practice it’s often absorbed or reduced when switching through Perch.
Calculate your switch benefit
The fastest and easiest way to determine your switch benefit — including costs like break penalties — is to add your property and mortgage details to your Perch account.
We've written an article on how to add your property and mortgage to your Perch account. We recommend checking it out to calculate your switch benefit.
After adding your property and mortgage, if you’d like to see the detailed switch benefit numbers, you can click the “view details” link below your switch savings opportunity for a full breakdown.
Of course, if you have any questions or concerns about your switch benefit we recommend reaching out to your advisor and they would be happy to answer any and all of your questions.
We've also written an article that walks you through the entire process to switch your mortgage and highly recommend checking it out.