Here is another example of outrageous pay out penalties charged by the banks. Click here for the CTV News piece. I am not making this stuff up.
Last year this person got an $180,000 mortgage at 2.79% for 5 years. Good rate. Unfortunately, she had to sell a year later. Figuring the current rate at the bank for 4 years term was 2.99%, she thought the penalty would be 3 months interest and not so bad. WRONG. It was a ridiculous $7500!
If she went with a monoline lender, the penalty would be around $1400. That is $6100 difference. $6100 for one year’s use of the $180,000 is actually 3.39%. In effect, the one-year mortgage at the bank was 3.39% MORE than the monoline lenders.
Keep in mind more than half of the homeowners break their mortgage before the end of the term. And the average break for a 5-year term is at the 3.5 years mark.
We feel that at Alternativelending.ca, we are ahead of the curve. We have been advising clients against going to the banks for a very long time. We bring value to the table by protecting our client’s interests. If you are looking for a mortgage, call John at 604-831-4437 and protect yourself against a nasty payout surprise!
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