Ask your Bank or your Calgary Mortgage Broker if your Mortgage comes with a Collateral charge!

What is a collateral charge mortgage anyways?

A collateral charge mortgage is a different way to secure a mortgage or loan against your property. Collateral charge mortgages allow lenders to change interest rates and/or lend more without the client incurring further legal fees. However other lenders won’t accept transfers from borrowers with collateral charges; borrowers must refinance which means incurring legal costs that would not otherwise be associated with switching lenders when you have
a standard mortgage.
 

Who should get a collateral charge mortgage?

When you know you might want to access more of your home’s equity in the first few years of your mortgage for things like debt consolidation or renovations. A collateral charge mortgage will allow you to do so without incurring more legal fees.

What does this mean?    That there are pros and cons to every choice.

 Important facts to know about collateral charge mortgages:

Pros
• Easier to access equity when your property
increases in value
• Withdraw home equity without refinancing
• Good product if you want to consolidate debt
or use your equity for renovations or investments

Cons
• Difficult to switch to another lender upon
renewal, legal fees may apply
• New legal fees apply if you switch lenders prior
to maturity for a better rate or product feature

How to avoid this…..or who does this?

• ING Direct
• TD Canada Trust
• Many credit unions

There was even a recent news article on this on CBC:

CBC News on Collateral Mortgages

The fact is that Calgary Mortgage Brokers have access to lenders who do not have to register mortgages this way.   Call one today to find out what is best for you!

Calgary Mortgage Broker