FAQs

Frequently Asked Questions

Timing is a king. It’s all about noticing opportunities and using them in timely manner. The fluctuation is here: Rates went down in March, then went up and now they start going down again. Employment situation is rapidly changing. It’s important to act now to benefit the most.
Of course, it’s not fair to expect your bank, which is, after all, working to win your business, will point you to their competition. But, at any given moment, the lowest mortgage rates and deals offered by different lending institutions are being updated. To get the best rate and the best deal, you need someone who is connected to all of the banks and lending institutions, and has access to all of the data and can see the overall picture, working for you. It’s important to know that your bank will likely be pushing a certain rate or package as their good deal – so while your bank might offer a great three year mortgage, their five year terms could be lousy, but someone else’s five year mortgage might be exactly what you need.
When you see the best rates promoted by a lender, keep in mind that some rates are offered only to specific clients. For instance: at a certain point in time medical doctors and chiropractors were offered rates that the general public, and even other professionals in the medical field, did not get.
Most mortgages let you increase your ongoing payments by 15-20% each year. In order to keep your flexibility, we at Sneg Mortgage Team highly recommend NOT to increase your payments without consulting us and learning all of the implications that come with doing so.
Although most borrowers in Canada prefer a five year contract, the life of the average mortgage is only 3.7 years, which means there is a good chance that you will pay penalties at some point. There are methods to decrease the penalties, but in order to do that, you must have flexibility. In particular, you need to have the flexibility to prepay on any day of the year, not just the anniversary of the mortgage. The limitation of prepayment to one day of the year can cost you thousands, if not ten thousand, dollars. Call us to see how we can help you pay less.
With most lenders the answer is no, unless you have an open mortgage or a line of credit on the house. In this case, the bank charges you a higher interest rate to allow the flexibility. The standard closed term carries penalty if you choose to end the contract midterm.
You met a nice bank officer, and he or she advised you to wait until you get permanent residence before you try to get a mortgage. It’s important to know that you don’t have to wait. Despite the bank’s beautiful building and nice lobby, and despite the suits and air of authority from the bank’s employees, most of these employees simply don’t know that there are plenty of mortgages available for people on work visas, with the lowest mortgage rates and terms available.
This is a tricky question and it’s a highly important piece of information if you are determined to pay off your mortgage faster and save thousands of dollars in interest. In most case you’ll be told that there are only two ways to calculate penalty. Three months interest is the common penalty for variable rate mortgage while interest rate differential (IRD) is the method to calculate penalty for fixed rate mortgages. In reality there are at least 3 additional methods which are not always clear when reading the mortgage commitment. Those methods make it almost impossible to break the mortgage and shift mid-term. Call us! We would love to share them with you.
You are the one financing all the literature and the city centre branch rental – whom else would it be? Canadian banks bring in profits of a billion dollars a year. They will offer you everything in order to have you as a client using a package of their financial products that are most profitable to them. You have a good chance of getting much better terms for any given service, including credit cards, savings accounts, lines of credits, mortgages and other financial services if you shop around. Keeping all of your accounts with one institution weakens your negotiating position.
In Canada, people tend to move frequently. Some mortgages don’t allow to port, or restrict it to less than 60 days, which means you have to coordinate the sale and the purchase dates. When it’s a simple port with no additional funds, most banks won’t charge you a penalty or will charge you and reimburse later. Credit unions will restrict you to their geographical boundaries. If you have a more complex mortgage (with a line of credit or cash back, for instance) or need more money, the game changes. In most cases you’ll be better off looking for a new mortgage to save you much more. En extra attention should be given to the new mortgage regulations that came into effect in 2018. Under those regulations, porting a mortgage as is becomes sometimes impossible.