So-called “Best Rate sites” are put to the test with shocking results.

which mortgageThere’s been a surge of ‘Best Rate’ sites popping up… Chances are, you’ve probably seen one or more of their online ads…   You know the ones…‘shopping’ for the Best mortgage rates in Canada’ and ‘comparing Canada’s mortgage brokers for the best rate”.   It does sound great… and it seems to be getting lots of attention… Even the media are covering and quoting these sites…  And although I like that these sites promote how Mortgage Brokers can offer great rates, I’ve noticed some disturbing trends that you need to watch out for.

“I JUST WANT THE BEST RATE”

You say you want the ‘best rate’?  Really?  Or do you want to pay the least amount of money on your mortgage?   I’ll bet it’s the latter.  Make no mistake, these two things are very different and I’ll prove it.  But let’s face it, the rate gets everyone’s attention.. Most people don’t want to hear anything beyond that.. until they get burned for $$thousands on the mortgage later on.

Now what if I told you that 80% of my clients were paying a rate of 1.35% during 2009 and 2010, would that get your attention?   Of course.  And it’s true.  80% of my clients were in a Variable Rate mortgage based on my recommendations….and almost all of them didn’t panic and lock into a fixed rate (like the BIG SIX BANKS wanted them to)…they stayed in those products based on my specific advice recommending they not lock into a Fixed rate….    That’s called being in the right product at the right time.  My average client saved $6,000 during that time. Read the rest of this entry »

What can $100 do when it comes to a mortgage?

No Mortgage When it comes to mortgages, $100 isn’t gonna get your very far.   But what if you paid an extra $100/mth towards your mortgage?  It’s not a lot of money these days but it can add up to some good savings.

We looked at a $300,000 mortgage with a 2.89% rate and a 25 year amortization. At the end of 5 years, the borrower had paid off an extra $6,444.   The balance owing was $249,435.   And their remaining amortization was 17 years and 9 months instead of 20 years.  This also represented an interest savings of $11,423 over the life of the mortgage.  Not bad.

Now let’s look at paying an extra $200 per month.  At the end of 5 years, the borrower had paid off an extra $12,888 . The balance owing was $242,991.  And their remaining amortization was 15 years and 11 months.  This represented an interest savings of $20,708 over the life of the mortgage. Read the rest of this entry »

RBC Boycott has gone viral with Facebook and twitter.

RBC-Bank It’s official.  Canadians are outraged over RBC replacing Canadian workers with foreign workers. The story broke this weekend from CBC and it’s not going away anytime soon.greedy banker

Over 5,000 comments were posted before the comments section was closed.   And now a Facebook page called ‘Boycott Royal Bank of Canada” and several twitter hashtags have popped up creating quite a buzz amongst Canadians.

RBC executives are trying to put a positive spin by saying they are trying to ‘redeploy the affected employees’.  Come on RBC, we all know what’s happening.  So let’s be very clear.  RBC is replacing current Canadian jobs with cheaper foreign labor.   The current jobs are being shipped overseas to India where labor is less expensive.   End result is a higher net profit for the RBC shareholder.   I guess 2012’s record $7billion profit just isn’t enough! Read the rest of this entry »

RBC accused of terminating Canadian workers in place of cheaper, foreign labor.

RBC-Bank RBC reported a record $7.5billion profit in 2012.  big newsThat was up by 17% from 2011.  Not bad.  In fact, all the BIG SIX BANKs had a great 2012… with a combined record profit of 30 billion!.   There’s nothing wrong with profit.  All businesses should expect to make a reasonable profit.   And a healthy and profitable banking system is important for Canadians.  Our Banks are so big that 5 of the top 8 most profitable corporations are now Banks.

But when is it enough?  And how far will the BIG SIX BANKs go to increase their profits?   Would you believe that Canadian Banks could or would outsource work to foreign countries to save a buck?!    CBC News reports that RBC is terminating 45 IT systems support jobs and replacing them with foreign workers.   iGATE corp. is an outsourcing corp from India with over 27,000 employees, according to their website. Read the rest of this entry »

Mortgage Penalties exposed… an in-depth study, part 2…the update.

greedy banker Two years ago I published, what would become, my most widely read article.   Mortgage Penalties exposed…. an in-depth study reveals unjust penalties was written to show just how unfair penalties had become.   The surprising results showed that the BIG SIX BANKS were the leaders when it came to charging the highest penalties in Canada.   If you had a Fixed rate mortgage and thought your mortgage penalty could only be a 3 month interest charge, you were in for a huge shock.

Consumers were experiencing $10k, $15k, $20k and even $30k in prepayment penalties and more! Ridiculous amounts.   Put another way, these penalties equaled 12, 16, 20 months worth of interest and sometimes more!   But we also discovered some good news..   There are better alternatives to the BIG SIX BANKS.!  There are several other Lenders that don’t use the same inflated and unfair prepayment penalty calculation as the BIG SIX BANKS.   There are other Lenders with competitive, and often better, interest rates, and with much lower penalties.  That original study opened the eyes of Canadian borrowers. (another eye-opening stat…the BIG SIX BANKS reported a record $30billion in combined profits for 2012.)

Two years later, with more consumers being forced into Fixed Rate products, we thought it was time to revisit Mortgage Penalties and see what changes had been made, if any…

Read the rest of this entry »

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