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CategoryMoney saving tips

Posted Case study

Rate shopping sites…tested again.. and failed again.

which mortgageA few years ago, I published a study on Rate shopping sites.   These sites were gaining popularity with consumers as a  place to go if you wanted to get the best rates.  And they attracted a lot of attention.

You know the sites… they have catchy ads like ‘shopping for the Best Mortgage rates in Canada’ or ‘comparing Canada’s mortgage brokers for the best rates’.  
Hey, who doesn’t want the best rate?  These ads work. Canadians were clicking these links to get more info.

Sounds great, right? Yet, it’s not.  
Continue reading “Rate shopping sites…tested again.. and failed again.”

Posted Money saving tips

$15,000 savings by breaking his mortgage early and getting into today’s low rates.

break your mortgage  Look, I don’t advocate paying penalties, however, if there is an obvious savings to be had, then you have to do it.   We’ve reached a point where interest rates are so low, it’s worth a review.  Here are some recent experiences with real people…. Enjoy.

I had one of my readers contact me about breaking his mortgage…  His current mortgage with a good lender.. a Non-bank lender..  his rate is 3.59%.   He took a 10 yr term last year.  Balance was over $500k.  So with 9 yrs remaining, we reviewed his options.

This was a no brainer.  Penalty to get out was under $5,000 (lucky he was with a non-BIG SIX BANK). But the savings over the next 5 yrs would be $20,500.   His net savings is $15,000.    Would you I recommend he break the mortgage?  Absolutely! Continue reading “$15,000 savings by breaking his mortgage early and getting into today’s low rates.”

Posted Case study

Attn: Ontario landlords… Rent control rules may not apply!

landlord-tenantDid you know that Alberta has no residential rent control?   And British Columbia landlords can increase rents by the rate of inflation PLUS 2%?   In Ontario, the Landlord and Tenant Board sets annual rent increases.   For 2014, the rent increase was a mere 0.8% and for 2015 the rents can only be increased by 1.6%.  Anyone that’s bought a rental property has probably been following these rules for years.   An increase of 2.2% over a 2 year period sounds great if you are a tenant, but somewhat unfair if you are landlord.

Now, what if I told you there’s a good chance your PROPERTY IS EXEMPT FROM ONTARIO’S RENT CONTROL RULES?  Meaning you can increase the rents as high as you like.   According to the Ontario Landlords Association, more and more properties are becoming exempt from Ontario’s rent control rules.  
Continue reading “Attn: Ontario landlords… Rent control rules may not apply!”

Posted 3 Comments on RBC charges homeowner $8900 penalty, or 15 months interest charge! Bank News

RBC charges homeowner $8900 penalty, or 15 months interest charge!

RBC-BankPicture this… Your mortgage is with the biggest Canadian Bank in Canada.  You feel sBankstersafe.  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…. Continue reading “RBC charges homeowner $8900 penalty, or 15 months interest charge!”

Posted Money saving tips

But it came in a beautiful box?!

canadian-money-giftIf I gave the option of choosing between 2 cell phones, which would you choose?   Both phones had similar specs and were identical in almost every way… except PHONE 1 came in a nicely gift wrapped box with a bow on it.   PHONE 2 came in brown paper bag but was less expensive and also had slightly better options.

Most of us would choose PHONE 2 right?  Wrong!   When it comes to mortgages, most of us are focusing too much on the beautiful gift box and not paying enough attention to the contents.  They say around 47% of all mortgages go through a BANK and 39% go through a Mortgage Broker.   Broker share is up, but not enough in my opinion.

When it comes to mortgages, the BIG SIX BANKS have been charging higher rates than what can be had from MORTGAGE BROKERS (see Bank of Canada study ‘competition in the Canadian mortgage market).   And their inflated prepayment penalty calculations are now infamous (typical BIG SIX BANK penalties are around 4 times higher than other lenders).
Continue reading “But it came in a beautiful box?!”