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Lets explore Canadian mortgage lock in policies ….
When you sign on the dotted line for your variable mortgage, the thought enters your mind; “what if mortgage rates sky rocket? Am I going to be in trouble? How will I make my payments?” You ask your banker the question and he smiles and calmly says not to worry and that you can convert your variable to a fixed rate at any time. While this is true, you should be suspicious, as with many bank policies how the truth is interpreted is somewhat subjective.
Canadian Mortgage Lock in Policies:
I have included below a quick reference table for you courtesy of my associate Daryl French at Gomax solutions.
| TD Canada Trust: | Discretion is decided by loan officer based on how strong they feel your relationship is with the bank. 1% off posted is guaranteed in year one. |
| CIBC: | The discount originally offered on your variable rate mortgage (VRM) is what will be applied to their fixed posted rates. |
| Scotia Bank: | Discretion is decided by loan officer based on how strong they feel your relationship is with the bank. |
| BMO: | Discretion is decided by loan officer based on how strong they feel your relationship is with the bank. |
| Royal Bank: | Discretion is decided by loan officer based on how strong they feel your relationship is with the bank. |
| HSBC: | Posted open after 3rd year. |
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Alternatives to the Banks’ Canadian Mortgage Lock in Policies:
With several of our leading trust companies such as First National, Firstline, and Resmor Trust, our clients are guaranteed the best discounted rate currently offered by the lender for their remaining term. Lets look at a case study with today’s rates and see what these difference Canadian mortgage lock in policies mean for you.
Mortgage amount of $300 000 with five years remaining on your term.
TD guaranteed lock in rate: 5 year fixed rate at 4.29%
First National guaranteed lock in rate: 5 year fixed at 3.49%
The difference in cost to you over your term based upon the different Canadian mortgage lock in policies is over $15 000. I think it might be a good idea to talk to a mortgage professional about all of your options before you sign your mortgage committment.
Please feel free to contact me as I am happy to discuss Canadian mortgage lock in policies along with your mortgage options to ensure we have the best fit for you, not just the best fit for the bank.