Hopefully by now I’ve taught you that not all mortgages are created equally.

Penalties, in particular, are hard to explain to people and many don’t understand or take the time to learn when it comes to signing their mortgage documents. On the other hand, some clients truly believe that they will be in this home three, four or five years from now – whatever the term of the mortgage. My comment is always, “whenever I’ve tried to forecast my life for the next three to five years, I’ve been wrong. Not understanding the penalty implications of your mortgage could cost you thousands.”

This recent article about a devastated TD client is a good read and explains the pitfalls of not thoroughly understanding what your penalty calculations will be.

The way I see it the client in this situation got the wrong mortgage and more importantly did not get the information they needed, to get the right mortgage for their unique needs.  If they would have dealt with me, they never would have had a news article written about them!

Clients automatically feel “safer” with the big banks, but the big banks also charge have the most restrictive penalty calculations. Remember, the lender is giving you money, not the other way around so, in my opinion, it is more important to go with a lender that has less restrictive penalties and the features you want than to go with a big bank.