Canadian housing mortgage rates are all over the map. Don’t get trapped in an unnecessarily costly mortgage agreement.
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How to save on home insurance Jul 10th
Affordable home insurance: Does it even exist? While home insurance is not mandatory by law, like auto insurance is, most mortgage lenders require it—and for good reason. Home insurance protects your home and personal possessions from damage or loss. Your home is collateral for your mortgage loa.... More »
Is the COVID-19 emergency over? An economists prosepective. + MORE Sep 14th
I recently participated in a conference call with Scotiabank’s Chief Economist & SVP, Jean-Francois Perrault and John Webster President & CEO Scotia Mortgage Corporation. It was good to hear real financial experts make sense of what has happened and what will most likely hap.... More »
House rich, cash poor: When a reverse mortgage might make sense Jul 14th
Reverse mortgages were at one time considered the Wild West of financial products, associated with aggressive and even predatory sales tactics targeting seniors in the United States. .... More »
Managing debt to build wealth + MORE Aug 23rd
It’s an eyebrow-raising trend: non-mortgage delinquencies have reached levels not seen since 2009, according to a report by Equifax, one of the three largest consumer credit reporting agencies. Specifically, 1.4 million people in Canada have recently missed a credit payment.
But it’s no.... More »
Latest in Mortgage News: Housing Affordability Back on the Decline + MORE Aug 15th
Following improvements in 2020, housing affordability worsened in the second quarter of this year by its widest margin in 27 years. The main culprit was rising home prices, according to National Bank of Canada’s latest Housing Affordability report. “Income growth and lower interest rates.... More »
The State of Mortgage Consumers
– canadianmortgagetrends.com
Mortgage consumer debt reached a record level in the second quarter of 2017, yet mortgage holders have proven capable of managing their increasing monthly obligations. That’s according to CMHC’s recently released Mortgage and Consumer Credit Trends report, which said Canadian households’ credit market debt reached a record $1.70 for every dollar of disposable income. Mortgage […]
Mortgage Penalties: You could pay thousands to break your mortgage depending on your lender!
– canadamortgagenews.ca
I originally posted a breakdown of how mortgage penalties are calculated by different lenders on January 4, 2011.
This remains relevant today and, since this has been my most popular article to date, it’s worth a repost!
WE TOOK THE MYSTERY OUT OF HOW PENALTIES ARE CALCULATED
We decided this needed a more detailed explanation… but a strange thing happened when we started to answer these questions. We made a startling discovery. We caution you – the results could get your blood boiling if you’ve had to pay a penalty!
We found that the banks have shrunk or reduced the spreads between their Posted and Discounted rates on shorter-term mortgages over the past few years… and this has had a huge impact on Interest Rate Differential (IRD) penalty calculations.
QUICK FACTS:
The most popular mortgage product is a 5-year fixed
The most profitable is a 5-year fixed
On average, a mortgage is refinanced or someone moves every 3 years
Mortgage penalties affect more people than you think!
FIRST, YOU NEED TO UNDERSTAND THE HISTORY OF MORTGAGE PENALTIES
To better explain the above statements, I need to explain why mortgage penalties exist at all…
