July 11, 2018

Mortgage Outlet – In the News

Posted By: MortgageOutlet.ca

Variable trumps fixed

According to one mortgage broker CMP spoke to, the real reason chartered banks have increased fixed rates is because they’re trying to shackle borrowers. “Banks are losing some of their customers at the renewal stage to mortgage specialty companies, and this makes it harder to switch lenders at renewal,” says Elan Weintraub, a mortgage broker and director of Mortgage Outlet. “The other thing it does is increase the profitability of banks because most people don’t pay posted rates, and if you break your fixed-rate mortgage during the term, the penalty is based on the discount you receive, so they’re essentially increasing that discount, which increases the penalty.”

 

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