What Pre-Payment Privileges Does My Lender Offer?
The easy answer is that major lenders in Canada, I think, have very generous pre-payment privileges, anywhere from 10-20 percent of your annual mortgage balance.
In my experience most people do not take advantage of their pre-payment privileges, so it really seems odd to me, to use that as a point of reference to choose which lender I’m going to use.
I think what’s more important is, having a strategy or plan in place, which reminds you to take advantage of your pre-payment privileges.
Again, in my experience when people have a few hundred or a thousand dollars sitting around, generally speaking it does not ever enter their mind to put that against their Mortgage.
At the Mortgage Centre Citywide, because of our online dashboard software system-we are continually reminding you about the benefits and virtues.and probing you to put that money-whether it be a hundred dollars, a couple of hundred dollars.against your mortgage.. which will make massive differences for you in the long term.
One other quick point, many of the major lenders have restrictions such as you can only make ONE lump-sum payment per calendar year ON the anniversary date of your mortgage. I don’t think that’s very helpful. BUT a Mortgage Professional, with more options available to them, will be able to match you up with a lender that will allow you to put frequent payments against your mortgage-which I think is more workable for people.
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