A strong mortgage plan starts by separating what is technically allowed from what is financially comfortable. A very low mortgage rate can come with restrictions that only become expensive when your plans change.
How lenders approach it
Here is what matters most:
- Look for limits on refinancing or breaking the mortgage before maturity.
- Review whether the mortgage can be ported and how the lender calculates prepayment penalties.
- Check whether the product is a bona-fide-sales-clause mortgage or has other restrictions tied to selling the property.
- Understand discharge, assignment and switching rules, especially if the mortgage uses a collateral charge.
Ask one simple question before signing: "What could make this mortgage expensive to leave?" Reference Sources for Rule-Based Articles Financial Consumer Agency of Canada - Down payment rules, mortgage preparation, stress test, choosing a mortgage, terms/amortization and prepayment information.https://www.canada.ca/en/financial-consumer-agency/services/mortgages.html Canada Revenue Agency - First Home Savings Account and Home Buyers' Plan rules.https://www.canada.ca/en/revenue-agency.html Canada Mortgage and Housing Corporation - Mortgage loan insurance premium schedules and insured-mortgage guidance.https://www.cmhc-schl.gc.ca/ Department of Finance Canada - Insured mortgage price cap and 30-year amortization reforms effective December 15, 2024.https://www.canada.ca/en/department-finance.html Bank of Canada - Policy interest rate and explanations of how rates affect lending and variable mortgages.https://www.bankofcanada.ca/
Want this applied to your own numbers?
Call Phil Cragg at 866-349-4915 or request a written comparison.
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