29 September 2010
The only exception is when the purchase and sale take place on the same day, but it’s really difficult to arrange it this way.
• Very poor conversion rate.
• Inability to refinance during the first year.
• No free switches.
• 25 years amortization limit.
• Minimum amortizations of 15-18 years.
• Restrictions on converting from a variable rate to a fixed rate for the first 6 months.
• Inability to port between the provinces.
• High administrative fees for porting.
• Requirement for a full banking relationship with the lender.
• No lump-sum pre-payment.
• No annual payment increase.
• Pre-payments are restricted to one specific day a year.
And there are more and more of them, that’s why it’s very important to pay attention to these details while comparing different mortgages. It’s even more important than rate comparison, because the lower the rate, the more your chances to overpay for such restrictions.