Long term is almost always more expensive.
Ever wanted to change cell phone providers? How about internet providers? Move your investments or rrsps? Cancel that hydro or gas contract because you moved?
And how about mortgages? When interest rates started heading down about 4 years ago, thousand of borrowers in fixed rate mortgages wanted to get out of their higher rates and start benefiting from the record low interest rates.
But borrowers were shocked to hear of unbelievably high early prepayment penalties… Penalties of $15,000, $20,000, $30,000. One recent situation had CIBC charging a $33,000 penalty on a $500,000 mortgage. I’ve seen dozens and dozens of situations like this. Almost all of these high penalties were from one of the BIG SIX BANKS… Continue reading “Long term is almost always more expensive.”