My brother purchased a house in 2014 and had a rate of 4.5%, then 2 years later he refinanced and was able to get a rate of 2.5%. Why would a bank choose to reduce the amount of money they would get on his mortgage?
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In some cases there is a fee/penalty paid to refinance early. Our last mortgage (2013) the penalty was approximately the same as 3 mortgage payments and is close to 100% profit for the bank.
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