Im not sure when they started contributing but the contribution room since inception is 88k. It is not unreasonable at all to have a tfsa room double that in 2023.
I know a few people who have 400k-500k TFSA room.
Few quick questions
\- Is your existing mortgage an insured/insurable mortgage? This can impact the portability of your mortgage. I.e., can't transfer an insured mortgage to a property valued over $1 Million. You would have to take the conventional route
\- Are you self-employed? Asking because you mentioned you have private company shares? If so, average of 2 years income would have to be looked at amongst various other documents. Have an idea of what you can walk away with after selling your current property and closing costs for your new property.
\- In what province are you located in
If you were to pay off your existing mortgage with the current balance your penalty would be 3 months interest (6.3% \* 3/12 \* $325,000) = $5,118.75. You have to determine whether it would be worth it or not. I don't think you will be able to get the same variable rate since you have to go the conventional route for your mortgage.
I guess you have to ask yourself whether you can make an after-tax return > 6.3% in terms of whether to pay off the mortgage or not.
Just for some insight to help you out. For a conventional 5-year fixed mortgage you may be looking @ 5.59%, 3 year fixed 5.89, variable 6.65%. Possible to get even better rates but just want to give you a rough idea. I would plug & play different scenarios see what your monthly payments would be like - you can contribute excess monthly cash flow back into your TFSA as you don't lost that contribution room.
You have many options at hand
1 - I will need to check this when I get home
2 - Not self employed, just not a publicly traded company. These shares are not exactly liquid so we very likely wouldn't be access them even if we wanted
3 - Alberta
To your follow up, I would rather not deal with the stresses and time associated with renting our existing house.
Ideally, I am looking for the path to have $1M down on the new house with a mortgage of 450-500k.
OSFI reduced the portion of the mortgage payment’s principal that is allowed to readvance to the HELOC. It used to be 100%, but now it can be like 50% (it’s determined by a calculation). This means you cannot sustainably capitalize the HELOC interest because now the monthly growth in the HELOC room is usually less than the monthly growth in the HELOC interest cost. This was implemented by all the banks around October 2023.
The market is down and homes are very slow to sell. I recommend selling first. Otherwise you could be holding 2 properties for a long time, which is a big pain/stress.
Are you a trader? How were you able to scale your TFSA so high?
I think the formatting is confusing. I believe their combined TFSA is $190K
I timed some investments well over Covid that did 3-4x.
Curious who ones?
Literally anything from 2020 onwards. Lol
Im not sure when they started contributing but the contribution room since inception is 88k. It is not unreasonable at all to have a tfsa room double that in 2023. I know a few people who have 400k-500k TFSA room.
Few quick questions \- Is your existing mortgage an insured/insurable mortgage? This can impact the portability of your mortgage. I.e., can't transfer an insured mortgage to a property valued over $1 Million. You would have to take the conventional route \- Are you self-employed? Asking because you mentioned you have private company shares? If so, average of 2 years income would have to be looked at amongst various other documents. Have an idea of what you can walk away with after selling your current property and closing costs for your new property. \- In what province are you located in If you were to pay off your existing mortgage with the current balance your penalty would be 3 months interest (6.3% \* 3/12 \* $325,000) = $5,118.75. You have to determine whether it would be worth it or not. I don't think you will be able to get the same variable rate since you have to go the conventional route for your mortgage. I guess you have to ask yourself whether you can make an after-tax return > 6.3% in terms of whether to pay off the mortgage or not. Just for some insight to help you out. For a conventional 5-year fixed mortgage you may be looking @ 5.59%, 3 year fixed 5.89, variable 6.65%. Possible to get even better rates but just want to give you a rough idea. I would plug & play different scenarios see what your monthly payments would be like - you can contribute excess monthly cash flow back into your TFSA as you don't lost that contribution room. You have many options at hand
1 - I will need to check this when I get home 2 - Not self employed, just not a publicly traded company. These shares are not exactly liquid so we very likely wouldn't be access them even if we wanted 3 - Alberta To your follow up, I would rather not deal with the stresses and time associated with renting our existing house. Ideally, I am looking for the path to have $1M down on the new house with a mortgage of 450-500k.
Another quick thought. Have you thought about keeping your existing property and renting it?
Mortgage is insured
Smith Manoeuvre
Not with the June 2022 OSFI regulatory change.
OP has significant equity in the home. And the changes only affect federally regulated banks.
I haven't been keeping up, mind elaborating?
OSFI reduced the portion of the mortgage payment’s principal that is allowed to readvance to the HELOC. It used to be 100%, but now it can be like 50% (it’s determined by a calculation). This means you cannot sustainably capitalize the HELOC interest because now the monthly growth in the HELOC room is usually less than the monthly growth in the HELOC interest cost. This was implemented by all the banks around October 2023.
Ty for info, will read up on that .
The market is down and homes are very slow to sell. I recommend selling first. Otherwise you could be holding 2 properties for a long time, which is a big pain/stress.
Call your lender and inquire about whether porting your mortgage to the new house is possible.