tag:blogger.com,1999:blog-5465015914589377788.post8064995012542760558..comments2024-03-20T09:32:16.592-04:00Comments on Michael James on Money: Interest Rate Differential on MortgagesMichael Jameshttp://www.blogger.com/profile/10362529610470788243noreply@blogger.comBlogger7125tag:blogger.com,1999:blog-5465015914589377788.post-42941407307173938092020-10-30T18:02:30.339-04:002020-10-30T18:02:30.339-04:00The comment above is a reply to Theo's comment...The comment above is a reply to Theo's comment:<br /><br />So here is one for you.<br /><br />Mortgage balance: 138,000 - 42 months left.<br />Current rate on my 5 yr closed is 3.9%<br />Banks says on Discharge Statement that they will re-invest at 4.10% interest rate yet want to charge me $5115 in penalty.!<br /><br />I think I'm getting hosed here.!!<br /><br />Main reason is that 10 days ago and I have e-mail to prove it, was quoted 1790 in penalty + 225 for admin fees...What say you.?? I think it should only be (in Canada), the 3 months interest. Which when the numbers come down is even less than quoted amount..About 1350.Michael Jameshttps://www.blogger.com/profile/10362529610470788243noreply@blogger.comtag:blogger.com,1999:blog-5465015914589377788.post-89424259720086786392010-11-11T00:02:24.462-05:002010-11-11T00:02:24.462-05:00@Theo: I'm trying to understand the figures y...@Theo: I'm trying to understand the figures you stated. What do you mean by "reinvest at 4.10%"? Are you selling your house? Based on the figures you mention the best plan is to stick with your current mortgage.Michael Jameshttps://www.blogger.com/profile/10362529610470788243noreply@blogger.comtag:blogger.com,1999:blog-5465015914589377788.post-44706206418513416602009-09-21T16:55:17.449-04:002009-09-21T16:55:17.449-04:00Rory: It is likely that the bank's actions ca...Rory: It is likely that the bank's actions can be justified by the language in your mortgage agreement, but that won't make the big penalty any easier to take. If people had these penalties properly explained to them, some customers who know they might have to sell their homes early might not opt for a long lock-in on their mortgages. As for the apples to oranges comparison, I suspect the bank would justify it by saying that they have already taken on default risk for giving you a mortgage in the first place and they deserve to be compensated for that risk. I don't fully buy this argument myself, but that is likely how the bank would present its case.Michael Jameshttps://www.blogger.com/profile/10362529610470788243noreply@blogger.comtag:blogger.com,1999:blog-5465015914589377788.post-24439966478372343892009-09-21T15:52:50.289-04:002009-09-21T15:52:50.289-04:00My wife and I just got hit with $18k Interest Rate...My wife and I just got hit with $18k Interest Rate Differential mortgage fees when we cancelled our 3-year closed mortgage with 26 months to go.<br /><br />This fee was never explained to us when we sat down an signed the paperwork, if we'd have known we'd have NEVER signed.<br /><br />What bothers me is our initial interest rate was 7.99% (obviously not for primo clients), but we're being charged the best rate now - 4.05% - on the cancellation. Why is that!?!? Shouldn't it be what we would be able to secure now?<br /><br />Apples to apples, oranges to oranges.Roryhttp://domainloonie.comnoreply@blogger.comtag:blogger.com,1999:blog-5465015914589377788.post-62988105300452616552009-06-02T01:12:09.352-04:002009-06-02T01:12:09.352-04:00I didn't realize this there was such a thing as an...I didn't realize this there was such a thing as an Interest Rate Differential, but it makes sense. It also puts mortgage break fees into perspective for me.genehttps://www.blogger.com/profile/05608927986297939720noreply@blogger.comtag:blogger.com,1999:blog-5465015914589377788.post-52235906650196579612009-06-01T10:08:12.705-04:002009-06-01T10:08:12.705-04:00Patrick: As far as I'm aware, an IRD would not ap...Patrick: As far as I'm aware, an IRD would not apply to variable-rate mortgages, but I recommend reading any mortgage contract before signing it.Michael Jameshttps://www.blogger.com/profile/10362529610470788243noreply@blogger.comtag:blogger.com,1999:blog-5465015914589377788.post-62025985225711615732009-06-01T09:59:08.301-04:002009-06-01T09:59:08.301-04:00I must say, this one lost me a bit, but my eyes gl...I must say, this one lost me a bit, but my eyes glazed over when you said "fixed-rate mortgage" since I don't plan to ever get one of those. Does this IRD apply to variable-rate mortgages?Patrickhttps://www.blogger.com/profile/16816252455472704262noreply@blogger.com