Skip to content

$4k penalty on a $109k mortgage… $8k penalty on a $213k mortgage.

This week I received a few more examples of the ridiculous penalty calculations that the BIG SIX Banks have been using…  If these penalties don’t scare you, then continue to deal with the BIG SIX.

One client has a mortgage with Scotiabank….$109k balance with a 3.60% interest rate and 3 yrs remaining… her penalty to get out is $4,000…!   That’s 10 months worth of interest.

Another client has a mortgage with TD Bank….  $213k balance with a 5.35% interest rate and 1 yr remaining… his penalty is over $8,000…..!  That’s equal to almost 9 months worth of interest.

If these penalties scare you then keep reading…there is a solution…

There are better alternatives to the BIG SIX Banks….  There are several smaller Lenders, good reputable firms, that don’t use the same formula to calculate your penalty….. and you don’t have to give up anything on rate, terms or prepayment privileges…

Had the Scotiabank client gone with one of my other Lenders, then her penalty would have been around $1340…   and the TD Bank client’s penalty would have been around $5140.

Get an unbiased opinion…. Speak with a neutral party…. Call your Mortgage Broker before making any decisions….  If you don’t have a broker, call me…I’ll be glad to help.

Steve Garganis View All

As an industry insider, Steve will share info that the BANKS don't want you to know. Steve has appeared on TV's Global Morning News, CBC's "Our Toronto" and The Real Life TV show. He's also been quoted in several newspapers such as the Globe and Mail, The Toronto Star, The Vancouver Sun, The Star Phoenix, etc.

5 thoughts on “$4k penalty on a $109k mortgage… $8k penalty on a $213k mortgage. Leave a comment

  1. I wish my penalty was this size. I have a penalty quote in hand that is $34,000 through Firstline. Locked in at 5.55% – 4 years remaining… around 520k left on the mortgage. In fact, it’s gone down. It has been as high as 39k. And the mortgage contract doesn’t elaborate on how the penalty is calculated… just says something along the lines of “we decide on how it is calculated and can change from time to time”–in the body of the contract. it’s crazy.

  2. Thanks for continuing to focus on the immoral penalties that the BIG SIX Banks are imposing on their clients. I hope that the facts surrounding this action can be made more widespread.
    Q: If I look at my mortgage contract, will I see a provision which tells me how my lender will calculate a penalty should I wish to refinance my mortgage before the Term is up? If not, I guess I have to state the obvious then… Is this even legal?

    • Hi Kevin, the language of the prepayment calculation has been an issue for many years.. but the BIG SIX Banks are powerful and the media doesn’t dare challenge this.. but this is a next generation. It’s the social media era… info is getting out more easily… people are talking… and they’re catching on. We don’t need to lose our leverage when negotiating with banks… there are several other lenders out there that offer better products and great rates…


Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: