Breaking a mortgage can be costly as rates fall. How to lessen the penalty – National [Video]

This article is part of Global News’ Home School series, which provides Canadians the basics they need to know about the housing market that were not taught in school.

The Bank of Canada’s oversized interest rate cut this week might have some Canadian homeowners locked into costly mortgages fantasizing about a more affordable rate.

Shubha Dasgupta, CEO of Pineapple Mortgage, says that after years of homeowners renewing into higher rates as the central bank hiked its policy rate, he foresees an uptick in broken mortgages as Canadians seek a better deal with lower rates materializing.

“You’re probably going to see a lot of Canadians breaking their mortgages mid-term that have secured higher rates over the last couple of years,” he tells Global News.

“Taking advantage of the current market conditions, break their mortgage and get into a lower interest rate.”

But the prospect of moving to a new home with a cheaper rate, or refinancing to take …