I came across a Royal Bank ad in the Globe and Mail this morning and just simply shook my head and said to myself, ‘we need to warn and educate consumers of the bank’s sly and misleading ads’. The RBC ad reads as follows:
“20 minutes could save you over $43,000 on your mortgage. Amazing! – A short chat with an advisor…can save you thousands and pay your mortgage off faster“. They (RBC) suggest to do three things: switch to bi-weekly payments, make one double up payment each year, and make an anniversary payment of $1,000 each year.
All great suggestions we at MonsterMortgage.ca use regularly BUT the fine print notes that the $43,000 savings is based on a 4.34% interest rate (much higher than rates currently available), 25 year amortization and to add insult, ‘a mortgage processing fee of $190 may apply’ which is written in a font barely seen! RBC uses a mortgage of $200,000 in the example to calculate the savings.
This is a three quarter page ad that is effectively attracting clients who want a plan and strategy but is it the best plan and strategy?
I believe we can do more and with a better rate and more effective plan at MonsterMortgage.ca.
Here’s how:
1) accelerated bi-weekly payments are a staple at MonsterMortgage.ca – we insist on it! Please note that making a bi-weekly payment at the amount level in the advertisement and taking a variable rate at 2.25% would provide savings of between $25K-42K more than the RBC suggested savings amount in the ad (depends on the speed of the increase in Prime by the Bank of Canada).
2) increase the payment to reflect the standard qualifying rate (SQR) resulting in an acceleration rate determined by the difference between the SQR and the actual rate paid (fixed or variable).
3) The MonsterMortgage.ca standard five year fixed rate is 3.99% and in some cases less for a no frills type product – a $700 per year savings from the RBC advertised rate.
4)MonsterMortgage.ca agents keep in touch through out the year to encourage you to make lump sums periodically, not just on the anniversary date.
5) Present opportunities like tax deductable mortgage plans where applicable.
6) MonsterMortgage.ca encourages the variable rate in today’s enviornment; selecting a variable rate mortgage can increase the accelleration rate two-fold – getting you to zero faster.
Bank mobile mortgage agents make more commission when you lock in to a HIGHER interest rate. Bank mobile mortgage agents work on a commission matrix that is simply a conflict of interest when it comes to the best interest of the consumer.
On the other hand, mortgage brokers and agents are compensated similarly regardless of interest rates; standard finder fees are paid by the majority of lenders we do business with. It is an unbiased approach that looks after the best interest of the client.
The main goal for MonsterMortgage.ca is to be a consumer advocate and save as many Canadians as much as possible of their hard earned money.
Unquestionably, MonsterMortgage.ca does have better options, solutions and strategies than what you would find at a Big Bank. Arm yourself with the information necessary to see past a banker’s claims – the banks will play your loyalty to the tune of a higher interest rate – You have a choice!
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