Posted by: Kristian Harris
This article in Moneyville in the Toronto Star, is a great piece about the mortgage penalties associated with breaking your closed mortgage, an issue that is very prevalent today. Most clients don’t anticipate the high amounts that they have to pay out in penalties when they decide to refinance or sell their homes, as these numbers are not standardized across the different lenders, nor are these figures disclosed at the time of signing.
Banks have always encouraged clients to go into five year fixed rate mortgage terms, yet the average time a Canadian will stay in a fixed mortgage term is 3.4 years. Now we know why the banks profit billions a year even during recessions and “credit crunches”.
As a homeowner or home buyer, keep the following tips in mind when shopping around for a mortgage or if you are considering refinancing your property:
These reasons and many more prove that as a consumer, you should be loyal to yourself first and commit to a variable rate mortgage so that you can be mortgage free faster. Remember, you have a choice.