• Flexible prepayment options
  • Standard charge
  • Offer line of credit
  • Not competitive for 30 year amortization,
  • Slow turnaround
  • Slow customer service

Information You’ll Need

Pre-payment options outline the flexibility you have to increase your monthly mortgage payments, or put in lump sum payments towards your mortgage. The monthly pre-payment amount is a percentage increase allowance on your original monthly mortgage payment, while the lump sum amount allows you to put money towards the mortgage principal.

A charge is a way the lender registers the mortgage against your property. Standard charges register for the mortgage amount you owe, where as collateral charge can be registered for up to 125% of your property value, rather than just what you owe. A collateral charge is also re-advanceable, so the lender can lend you more money after closing without you needing to refinance and pay a lawyer fee again.

Fair penalty lenders calculated your fixed rate an early-termination penalty without using ‘posted rates’ like major banks do. This allows an early-termination penalty with a ‘fair penalty’ lender to be up to 2-3x less than a major bank’s fixed rate penalty.

Anytime you take a 30 year amortization on a mortgage, buy a rental property, refinance your home, or buy a home priced over $1 million, you require an uninsured mortgage. As an uninsured mortgage cannot be insured against default, they normally carry higher interest rates than insured or insurable mortgages.

Some lenders like major banks allow for flexible qualifying criteria. Most monoline lenders on the prime lending side have strict qualifying criteria policies that they must adhere to, with no exceptions to the debt-servicing ratios.

If your mortgage rate is being compounded semi-annually, it indicates that the interest is being compounded twice a year instead of just once. The shorter the time frame of compounding(such as monthly), the more it could cost you.

Portability refers to being able to take the existing mortgage and rate you have, and transfer it to a new property that you have purchased. When you are selling your existing home and buying a new one, this is where porting comes in to play. Porting allows you to avoid any penalties to break the existing mortgage, as well as keep your existing interest rate in some cases. Some lenders have restrictions on porting where you can only port a mortgage if the closing of the new home is within 30 days of the sale of your existing home.

A bonafide sales clause refers to a restriction on the mortgage where you cannot break the mortgage before your term is up, unless you are selling the property. In the event you wish to break the mortgage to refinance, it must be with the same lender that the mortgage is placed with. When you are up for renewal you can switch to any lender you like. This is also referred to as a ‘low-frills’ product.