Is it worth it to break your mortgage early for today’s record low rates?

General David Cooke 18 Aug

Is it worth it to break your mortgage early for today’s record low rates? In a word, yes. In many cases, getting out of a mortgage where you are paying more than 3% for a mortgage rate of 1.89% today is often worth it.

A recent piece by Rates.ca gives an example of a client who had mortgage at 3.39%. He now could get 1.99%. The penalty was high’ over $32,000 but his broker showed him that by making a penalty free 20% prepayment and then re-investing his savings in prepayments over the next 5 years,  he saved an additional $19,248.

This strategy doesn’t work for everyone but it’s worth checking out your options. Call me if you want to crunch the numbers. Maybe we can save you thousands on your mortgage today.

Haventree Bank – Canada’s Newest Bank

Latest News David Cooke 12 Aug

Lately , we have been hearing a lot in the news about mortgage deferrals. Putting off mortgage payments during the pandemic and then starting the payments up again when people are back at work. This actually isn’t a new idea,  Haventree Bank have been doing this since they first opened in 2018. Haventree is a different sort of bank. They cater self employed people who can’t easily proof their income and to people who have been through a tough time and and getting back on their feet.

An important part of the bank’s business plan is to ensure that their borrowers do not get themselves into a situation where they would have to default on their mortgage. It’s an idea brought over from Genworth Canada , one of Canada’s private mortgage default insurers to Haventree. The idea is that if there’s a sudden change in your situation, you need help to get through this difficult period and once it’s over you will be able to carry on with your payments and keep your home.

3 Ways the Bank keeps you in your home

How do they do this?

Canada's Newest Bank 1- forbearance – it’s a fancy word for mortgage deferral. If a borrower has to stop work due to illness, is laid off, the mortgage payments are stopped in order for you to get back on your feet.

2- If you lose your job, they will offer you a job search service through a 3rd party who will help you prepare your resume and help you to get a new job quickly.

3- Encompass Home Warranty – If you are using Haventree Bank for your mortgage you often do not have a large amount of money tucked away for emergencies. Haventree knows this and knows how much emergency repairs can cost. They offer , free of charge, a home warranty insurance that covers heating, cooling , electrical and plumbing systems repairs. Your hot water tank breaks down on a Sunday night and you need to call a plumber?  Weekend premium charges and the cost of a new tank will set you back around $1000.  Now, with Encompass, you pay a $50 deductible for using the service. If your furnace breaks down or a pipe bursts, you’re covered.

By making things easier for their borrowers, the bank lowers the number of defaulting mortgages and foreclosures which is good business. Who knew that being nice to your clients would end up saving money and making a bank look like the good guys?

If you have a challenging situation , contact me . Haventree or one of our other lenders may have a solution for you.