Should we use a Mortgage Broker? Yes! These days mortgage brokers tender out new mortgages to the banks. This way the banks are competing for your business and you tend to get the best interest rate. However if you choose not to use a broker, shop around yourself. If you are determined to use your own bank, go back to the bank with the facts and negotiate with them.
Yes! If you don't use a mortgage broker, you need to shop around yourself and clearly understand your options before going back to your bank to negotiate.
What is meant by the posted rate? The posted rate is the official Bank rate set by the Bank of Canada. The discounted rate is what you are look for, each bank will have their own discounted rate.
This is a personal choice, some people want the security of a fixed mortgage and because of this security you will pay a higher rate. Variable offers a lower rate but more risk - it fluctuates with the interest rate set by the Bank of Canada. Please note if you choose a variable rate, make sure that the interest is compounded semi-annually and not in advance and not monthly!!
How is interest compounded and why is this important? By law fixed mortgages are compounded semi-annually and not in advance. This is not case with all of the variable mortgage products. It is important because monthly compounding translates into a higher interest rate and total mortgage cost.
What penalties can we expect for breaking the mortgage? Check out mortgage penalties before signing! Typically it is the higher of 3 months mortgage interest or the interest rate differential on the remaining term of the mortgage that you will be penalized.
"Because our homes are so important to our daily quality of life and because a sound real estate investment is key to a family's financial future, to me, helping people buy and sell homes is a very big responsibility. It would be a privilege to help you" Carol Jones
