Word can spread pretty quickly in the Kitchener Waterloo mortgage Rate War world, and today has not been an exception to this. Case in point: BMO has recently announced an aggressive move to lower its 5 Year rate special to 2.99% in an attempt to move business and gain market share. 2.99% is an excellent rate, and is definitely worth considering – so why don’t we do just that… Let’s take a closer look at the BMO mortgage offering to see how special this special, really is.
Mortgage Term: The BMO term is FULLY CLOSED, which means the mortgage cannot be broken at all, unless the house is sold, or the mortgage is Refinanced with BMO exclusively. This can have major implications to perspective clients, given the reality that most mortgage holders require major changes or breaks throughout their term.
Penalty: A non-discounted penalty applies if the house is sold and the mortgage is paid off. If refinancing to consolidate debts during the term, a non-discounted penalty would apply to these extra needed funds.
Pre Payment Flexibility: Is limited to 10% for lump sum pre payment, and 10% for payment increases per year. The wholesale broker standard is 20% per year, or even higher, at any payment period…
Amortization: Limited to 25 years. May not be a factor to some, but in case of job loss or another unforeseen life event, it removes the opportunity for temporarily lowering the mortgage payment significantly, until the life event has been resolved.
Service: The added value that a broker can provide is not present when dealing direct with a big bank. Real value added services such as re shopping the market at renewal, constant combing of the market for additional client savings opportunities, and unique services such as our own Mortgage Free Sooner plan can really add up the savings over time.
So while the recent 2.99% promotion isn’t necessarily a bad deal, it certainly, and literally pays to read the fine print of the mortgage details, especially when equivalent if not lower rates can be achieved in the broker world without such restrictions.
For timely mortgage advice and information in Kitchener, Waterloo and the surrounding areas, contact your dedicated Mortgage Team at The Mortgage Centre Kitchener Today!
Business Development Manager