Is your mortgage currently with one of Canada's big chartered banks? Have you opted for a fixed rate term? If so, you could be in for MUCH more than you bargained for. Check out the payout calculators below to see what your penalty would be if you decided to give your big bank--the boot, and think twice before signing on the bottom line as there are MUCH better options out there
Scotiabank
Every chartered bank in Canada use what's called an Interest Rate Differential calculation if you decide to make changes or end your mortgage before your specified term is up. Basically, it means you are going to pay a fine to leave them, and sometimes, it can be a HEFTY one.
BMO
Too many people are under the false premise that their penalties are being "waived" if they stay with their current bank for the next one, but this is just not the case. Borrowers are generally offered a "blend & extend" option which amortizes the penalty back into the mortgage in the form of a higher rate. That's right, now you're paying interest on interest. This is just one of the ways which the big banks continue to siphon billions every year from their loyal clients pockets.
TD
When signing a new mortgage, very few people expect to end their mortgage early, but the stats show that more than 85% of mortgage holders in Canada end up terminating their loan prior to renewal. This means thousands of dollars in equity is being plucked right from your pocket.
RBC
If you'd like to know which lenders still offer low rates, excellent flexibility and none of these ridiculous IRD penalties? Drop me a quick note at mark@normanlane.ca and I'll send you a free report that guarantees you won't get fooled again!!
P.S. - We have the CIBC's online calculator but it's incorrect, we compared their website which showed the penalty at $2800 yet, when the client called it was over $14,000.
