What is an Interest-Saving Mortgage?

One of the problems in the mortgage industry is the way they are advertised, which is usually by rate. If an online rate says 1.9 per cent, chances are home-buyers are going to look at it.

What many don’t realize is that saving interest is what saves money in the long run, and that rate is only part of the story. On a $500,000 mortgage, a rate of 0.1 per cent lower does not even equate to a saving $500 a year. However, the right mortgage can save you a lot more than that.

Saving interest is the key to managing your debt and building your wealth. Although we do consider the rate the real savings result from the little things you don’t see with an advertised rate, such as finding the right combination of options, privileges and payment schedules to maximize your savings.

For instance, dropping a few hundred dollars against your mortgage principal once every now and then could help you save thousands in interest and shave years off your mortgage. That’s because
if you knock down the principal even a little, every dollar you pay after that will go further.

Mortgage contracts are full of wicked details that make winners and losers of Canadian home-buyers. Rates are just the lure. Generally, the lower the rate, the bigger the catch.

With more than 50 lenders – including most of the major banks – we can build you an interest-saving mortgage. Together we’ll look at:

• Prepayment privileges, which are those options that can help you reduce your debt by increasing your payments and/or putting down lump sums.
• How to get favourable rates and terms in case you want to port your mortgage from one property to another (unless you want to stay in your home for good).
• Fees for breaking the mortgage. This is a big one since there can be substantial differences between lenders. Life happens. If there’s even a chance you’ll need to break your mortgage, going with a lender that has reasonable fees can save you thousands.
• Minimizing all restrictions and fees as much as possible.

These key mortgage features don’t fit in a rate ad. But trust us, this is where the rubber hits the road in building the right mortgage.

Catch yourself looking at low online rates? It might be time to come in for a chat. Let’s have a conversation about building your custom interest-saving mortgage!

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Rasha Ingratta & Mortgage Associates

By Mortgage Intelligence

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