Picture this… Your mortgage is with the biggest Canadian Bank in Canada. You feel safe. You got a great rate at the time… 2.99%. What could go wrong? Well, for these clients, and hundreds others, plenty!
Check out the RBC Discharge stmnt oct 2014 showing an Interest Rate Differential (IRD) prepayment penalty of $8912 on a mortgage balance of $213,562. Now, $8912 is a lot of money, but you’ve seen me expose even higher penalties in the past. Penalties as high as $35,000 and $40,000. But, put another way, that’s over 15 months worth of interest penalty being charged. And that’s just ridiculous!
NEWS FLASH! This type of inflated prepayment penalty calculation isn’t exclusive to RBC, the rest of the BIG SIX BANKS use a similar calculation. And they’ve been getting away with these outrageous penalties for over 14 years! (actually, this isn’t a new story.. I’ve been writing about these nightmare, or bankmare, penalties for years.)
Let me put this another way…. Read the rest of this entry »