Our goal is to provide our clients with sound mortgage advice and suitable options that will help them save money and achieve their real estate goals. Therefore, each month we send an email updating our clients with the best interest rates available. This way you can compare what they currently have. Here is a quick recap on terms we use within that communication:

Insured Mortgage

• Less than 20% down
• Maximum amortization of 25 years
• Borrower (you) pay for mortgage insurance

Insurable Mortgage

• Minimum 20% down
• Maximum amortization of 25 years
• Bank/Lender pays for mortgage insurance
• Property must be valued at less than $1,000,000

Conventional Mortgage

• Minimum 20% down
• Maximum amortization of 30 years
• No mortgage insurance is required

The benefit to switching lenders is as follows – if the savings you’d receive by switching is greater than the penalty incurred for breaking your mortgage mid-term, then it’s best that we move your mortgage.

Mortgage Penalty:

• Fixed interest rate – The greater of 3 months interest or the Interest Rate Differential
  • You’ll need to contact your bank to determine this amount
• Variable interest rate – 3 months interest (roughly 1.5 times your monthly mortgage payment)

Other costs to consider when switching lenders mid term:

• Legal fees and Appraisal – Most of the time legal fees are NOT paid if the mortgage amount does NOT change. If you want to consolidate any other debts into your mortgage, then a legal fee would apply.

Other notes:

• One cannot switch from a conventional mortgage to an insured mortgage
• It’s possible to switch from an insured mortgage to an insurable mortgage if the value of your home has gone up considerably since you bought it, and the loan amount is now less than 80%.

Hope this helps! And if you want to be added to our monthly communications, please reach out to our team.