THIS is why I don't use Big banks for Mortgages!
Hi all,
I currently have a client who "unexpectedly" is breaking his mortgage (as up to 65% Canadians do)
I had him check to see what his penalty would cost. He has a 10 year mortgage, but keep in mind that the fee after 5 year term is minimal. . . so basically he has 1 1/2 years left on his mortgage.
The next time you consider a mortgage with a Big bank, think about this penalty below!! I have directly copied and pasted from the email he sent me. Obviously there is no personal info. attached. His Bank is CIBC.
Mortgage Prepayment Charge Calculator
Your Prepayment Summary:
Based on the information you provided, your prepayment charge will be approximately $33,137.79, if you were to pay off your mortgage on March xx, 2016.
Prepayment charge: $33,137.79
Calculation type: Interest rate differential
Remaining term: 7 year(s), 6 month(s)
Comparison rate: 7 year, 5.850%
Current balance: $391,947.12
Current Interest Rate: 3.890%
Rate discount received: 2.860%
Mortgage type: Fixed
Maturity date: 2023/10/01
Prepayment charge: $33,137.79
If you'd like to compare. . . one of my favourite lenders penalty would have been under the same circumstances. . . .
$4,077 Another lender I use would have been $4,132
Still have that "feel good" feeling dealing with your local bank?. . ..