Ok, so this isn't Canadian Tax but I don't see any other Canada specific finance group so I hope it's ok I post this here.
I came across this article on reddit:
https://martinsmoneymusings.substack.com/p/martins-mortgage-maneuverThe author claims that if you are in a fixed rate mortgage with a high rate you can break it at minimal (3 month interest) cost by:
1. Blending and extending your current mortgage. This, he claims, re-sets the rate that is used to calculate penalties.
2. Shop around for the lowest rate possible
3. Break the current mortgage and get the new one with only 3 month interest penalty.
Each step seems reasonable, the only thing I'm not sure about is the IRD being re-set when you blend and extend. Assuming this works I'm shocked I've never read bout it before as it seems like an incredibly powerful tool and really negates the risk of taking a fixed rate mortgage (for the borrower).
Does anyone see a problem with this approach? Anything that the author or I am missing?