本文发表在 rolia.net 枫下论坛So far I know that Scotia is better regarding the term condition of closed fix rate mortgage.
Normaly Scotia mortgage is have a close-close period and a close-open period within a term.
in your example, 5 year term, the first 2 years are considered as close-close period. The rest of other 3 years are considered as close-open period.
Within close-close period, if you renew your mortgage you have to pay the interest difference for the rest of the term. If you switch mortgage or discharge your mortgage you pay the interest for the rest of the term as penalty.
If you're in the close-open period you pay maximum 3 month interest plus admin fee for penalty.
This was written in my previous mortgage renew letter from Scotia two years ago. I don't know if Scotia still have it or not since I don't do banking with Scotia any more.
Penalty clause is really hard to negotiate.
BTW, in your case, even you pay the penalty, I don't think you're getting any benefit renewing it with the new rate. Paying the penalty technically means you're still getting your old rate for your current term (6.0 for 5 years, not mentioning that if you do pre payment you may decrease your overall interest a lot.)
The benefit (if there is any) comes to the additional 2 years (I assume that you're renewing to another 5 year. But even the new rate is low it can't compete to the low rate for 1 or 2 year term. I don't think it's a good idea to re-new to such a new term.
Also one thing I don't understand is that why the penalty is calculated based on posted-rate rather than actual contract rate. Interest difference on the contact rate is the real thing the bank cares. Is that because you're using them only as an example?更多精彩文章及讨论,请光临枫下论坛 rolia.net
Normaly Scotia mortgage is have a close-close period and a close-open period within a term.
in your example, 5 year term, the first 2 years are considered as close-close period. The rest of other 3 years are considered as close-open period.
Within close-close period, if you renew your mortgage you have to pay the interest difference for the rest of the term. If you switch mortgage or discharge your mortgage you pay the interest for the rest of the term as penalty.
If you're in the close-open period you pay maximum 3 month interest plus admin fee for penalty.
This was written in my previous mortgage renew letter from Scotia two years ago. I don't know if Scotia still have it or not since I don't do banking with Scotia any more.
Penalty clause is really hard to negotiate.
BTW, in your case, even you pay the penalty, I don't think you're getting any benefit renewing it with the new rate. Paying the penalty technically means you're still getting your old rate for your current term (6.0 for 5 years, not mentioning that if you do pre payment you may decrease your overall interest a lot.)
The benefit (if there is any) comes to the additional 2 years (I assume that you're renewing to another 5 year. But even the new rate is low it can't compete to the low rate for 1 or 2 year term. I don't think it's a good idea to re-new to such a new term.
Also one thing I don't understand is that why the penalty is calculated based on posted-rate rather than actual contract rate. Interest difference on the contact rate is the real thing the bank cares. Is that because you're using them only as an example?更多精彩文章及讨论,请光临枫下论坛 rolia.net