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Tag5 year fixed rate

Bank of Canada Raises Rate by 0.25% – Is it Time to Worry Yet?

As predicted, the Bank of Canada raised their benchmark rate a few days ago. No surprises here. And yet, the media will make you feel like this was out of left field. Even worse, they’ll spew fear mongering dribble that the train is off then rail. That every single BoC meeting for the rest of the year will result in a rate pump. That we’re heading for a market crash of epic proportions. So is it time to worry yet?

I’m here to tell you this: turn off the television and take a deep breath. There’s nothing to fear.

Continue reading “Bank of Canada Raises Rate by 0.25% – Is it Time to Worry Yet?”
Beware of Mortgage Penalties

Beware of Mortgage Penalties

Beware of Mortgage Penalties

I originally posted a breakdown of how mortgage penalties are calculated by different lenders on January 4, 2011.

A recent article outlining how TD Bank charged a $30,000 mortgage penalty to a woman forced to sell her home due to the Covid-19 pandemic shows how this remains relevant today.

WE TOOK THE MYSTERY OUT OF HOW PENALTIES ARE CALCULATED

We decided this needed a more detailed explanation… but a strange thing happened when we started to answer these questions. We made a startling discovery. We caution you – the results could get your blood boiling if you’ve had to pay a penalty!

We found that the banks have shrunk or reduced the spreads between their Posted and Discounted rates on shorter-term mortgages over the past few years… and this has had a huge impact on Interest Rate Differential (IRD) penalty calculations. Continue reading “Beware of Mortgage Penalties”

Mortgage Penalties: You could pay thousands to break your mortgage depending on your lender!

Young family discussing family finances

I originally posted a breakdown of how mortgage penalties are calculated by different lenders on January 4, 2011.

This remains relevant today and, since this has been my most popular article to date, it’s worth a repost!

WE TOOK THE MYSTERY OUT OF HOW PENALTIES ARE CALCULATED

We decided this needed a more detailed explanation… but a strange thing happened when we started to answer these questions. We made a startling discovery. We caution you – the results could get your blood boiling if you’ve had to pay a penalty!

We found that the banks have shrunk or reduced the spreads between their Posted and Discounted rates on shorter-term mortgages over the past few years… and this has had a huge impact on Interest Rate Differential (IRD) penalty calculations. Continue reading “Mortgage Penalties: You could pay thousands to break your mortgage depending on your lender!”

Should you look at 10 year fixed rate mortgages?

Fixed rate mortgageToday, right now, we are experiencing all-time record low fixed mortgage rates.  Great news if you need a mortgage.  And some of you may be thinking of locking into a longer term mortgage.   Let’s take a look at that option.

Going longer could be an option for some.  The Best 5 yr fixed  is around 2.59%.. some special deals exist for larger mortgages or faster closings… but let’s use 2.59% for now.   Does it make sense to pay 0.30% more for the first 3 years of your mortgage, just for the benefit of knowing what your rate will be for the last 2 years?

(a warning… you’ll see lower rates advertised.. but be careful.  There are so many NO FRILLS products or products that carry inflated penalty calculations, limited repayment options and other hidden fees.. stay away from those)

Continue reading “Should you look at 10 year fixed rate mortgages?”

I have 2.39% for 5 yrs fixed available…but I wont sell it.

percentageIt’s true.  I have access to this great rate.  It’s around 0.20% lower than the best rate today.   And you won’t see me recommending it to my clients.

That’s right, I’m recommending they don’t take it.

Why?  It’s simple.  No, I don’t want my clients paying more on their mortgage. I want to see them PAY LESS to own their homes.  This is one of those products that carries an inflated prepayment penalty. Should the homeowner need to get out of their mortgage early, they will be hammered with a ridiculous exit cost.   We’re talking 10, 12, even 16 months worth of interest penalty.

Statistics clearly show we are paying or changing our mortgages every 3 years.   So, chances are, you will have to pay this penalty.   On a $300,000 mortgage, your penalty could be $9,000 or more.  Compared with $1,943.  That’s a $7,000 difference.

That 0.20% savings on the rate equals $600 per year..   You still think that 2.39% rate is great??

The next time you hear or see something that sounds too good to be true, it probably is.  If you aren’t sure, call me or an experienced Mortgage Broker for unbiased advice.

Your best interest is my only interest.   I reply to all questions and I welcome your comments.  Like this article?  Share with a friend.

Steve Garganis 416 224 0114 steve@mortgagenow.ca