Don’t let this happen to you.
The following is about a client who was hit with a handful of unexpected and ridiculous fees for discharging their variable rate mortgage from one of the ‘Big Banks’. This client’s story struck such a bad chord with us here at MonsterMortgage.ca that we felt compelled to try and give it national attention so that consumers were made aware of it.
Thanks to our client and Rob Carrick from the Globe and Mail for helping to make this happen. To view a copy of the article in today’s Globe and Mail click here.
There are many reasons why more and more people are realizing that they should be loyal to themselves first and why they should seek trusted mortgage advice from a mortgage broker and not their bank.
To be frank, when it comes to mortgages, the banks’ treatment of their clients is one of the main reasons why people like you are choosing to use experienced mortgage brokers, rather than their bank, every day.
Traditional costs for breaking a mortgage early is the standard three months interest or Interest Rate Differential (IRD) penalty plus discharge fee. Upon closer inspection, this client found three additional charges above and beyond the typical standard penalties:
This client is currently paying a variable rate of 2.50% (Prime – 0.50%) and the current published variable rate on their bank’s website is posted at 3.20% (Prime + 0.20%). If you really think about this, the bank is charging the borrower to get back the bank’s money (at a lower rate) and lend it back out at a higher rate. It’s an unnecessary charge and a simple cash grab by the big bank.
Charging a fee and calling it a ‘Transfer Fee’ is a duplication of the typical discharge fee and since this client is paying out their mortgage in full, there is nothing to be transferred. Yet another cash grab.
This is a charge passing blame to the government; however, this cost is already accounted for in the discharge fee which is applied by the land registry office when a discharge is registered. What the bank is doing here is charging $1 for the lemonade and $0.50 for the lemons.
If you want to know if this could happen to you, give MonsterMortgage.ca a call or fill out a contact request today and one of our mortgage experts would be happy to review your mortgage contract for any inefficiencies that could be costing you thousands of dollars.
You owe it to yourself to keep more money in your pocket, not your bank’s.BACK TO BLOG FEED