CategoryMortgage Tips

Posted May 8, 2013 Bank News

More BIG SIX BANK penalty nightmares… when will Canadians learn to look elsewhere for their mortgage?

Here’s a great article from The Star’s Ellen Roseman on mortgage penalty nightmares. She shares just a few stories out of the dozens she’s received over the past little while. There is no reasonable justification for charging borrowers these inflated penalties… If you think your immune from these penalties, think again.

Notice the name of the Banks that are mentioned in her article… Yes, part of the BIG SIX club… Don’t get lulled into believing that dealing with a BIG SIX BANK offers some sort of immunity from higher penalty charges… The experiences of these borrowers and countless others proves otherwise…

I’ve been getting more calls and comments on this recently… $10,000, $15,000, $20,000 in penalties. How is it that the smaller Lenders can offer the same or better interest rates, and not charge these inflated penalties? The BIG SIX BANKS reported a record $30billion combined profit in 2012…!! Doesn’t make any sense, does it? And yet, it continues…

Remember, there are several other Lenders that don’t calculate their penalties with the same inflated formula… Seek advice from a mortgage broker… get another opinion… There are better options and I have access to them! It’s no secret…. I’m happy to share this info to anyone that wants it.

Come on Federal govt… do something to stop this madness and protect Canadians from this gouging!

Your best interest is my only interest!

As always, I welcome your comments, calls and questions.

Steve Garganis 416 224 0114 steve@mortgagenow.ca

Posted April 27, 20131 Comment Money saving tips

What can $100 do when it comes to a 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. Continue reading “What can $100 do when it comes to a mortgage?”

Posted April 1, 20133 Comments Debt

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

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…

Continue reading “Mortgage Penalties exposed… an in-depth study, part 2…the update.”

Posted March 5, 2013 Interest rates

BMO’s 2.99% No Frills mortgage is back… and so is our warning to stay away from it!

So you’re shopping for a mortgage… and you see 2.99% advertised by BMO.. and you think, Wow, that’s a great rate!!… but is it really that great? And is it really a great mortgage product?

Well, first, what if I told you there was a lower rate out there? And what if I told you there was a lower rate without the restrictions and limitations of BMO’s NO FRILLS mortgage?

Ok, now that I got your attention, let’s continue…We saw this same product and rate advertised last year, in January 2012. BMO promoted their NO FRILLS, oops, I’m sorry, they want us to call it a ‘low-rate’ mortgage (guess that sounds better). There was a buzz in the air. My phone rang off the hook and my inbox was full of emails asking what this was all about. Continue reading “BMO’s 2.99% No Frills mortgage is back… and so is our warning to stay away from it!”

Posted February 27, 2013 Interest rates

Does 10 yr fixed rates make sense now?…

Fixed rates are still low… and a question I seem to get asked more often these days is, “when does it make sense to take a 10 year fixed rate?” And the answer, for me, is almost never.

Today, you can find a good 10 yr fixed rate under 3.70%. That’s a historical low rate for a 10 yr term. When you hear ‘record low’, it’s worth taking a look.

THE GOOD:

peace of mind… there is something to be said for knowing what your payments will be for the next 10 years. It’s like buying insurance.
we are at historical low 10 year rates.
if you paid your mortgage out after the 5 year mark, your penalty is capped at 3 months interest (a hidden provision in our mortgage laws…. I’m sure the Bankers are trying to get this removed too). Continue reading “Does 10 yr fixed rates make sense now?…”