I thought I would remind everyone about the cost of penalties when breaking a mortgage during term. A lot of people think that one lender is the same as the other, but you can be terribly wrong with that mindset. The Globe and Mail published an article called “The Hidden Trap of Mortgage Penalties” and is worth reading. It is likely a wake-up call to most.
When you go to one of the Big Five banks web sites and look at their mortgage rates, a 5 yr fixed term with most is 4.64%, where as if you go to some of the other trust and credit Unions(we call them Mono Line lenders),a posted 5 yr fixed rate can be as low as 2.69%. As the article points out, it is these “posted” rates that can dramatically affect your penalty when the IRD(Interest rate differential) part of the penalty formula is used.
Just another reason you should shop around and talk to a good mortgage broker(hopefully me 🙂 ) and NOT just your banker. Have a mortgage question? Please feel free to drop me a line anytime, 7 days a week.