As a non-resident, and through a Canadian lender, you have a choice of fixed rate terms from 1 to 10 years. The loan can be amortized up to 25 years.

Fixed Rate Financing

They are closed interest rate contracts – closed for the term you select, ie one to 10 years. The penalty to break the interest rate contract prior to the maturity date is the GREATER of 3 months interest, or the IRD (interest rate differential). The IRD is the bank’s loss of interest for the time remaining in the term. So if you take a 5 year fixed and pay it off after 3 years, either from your own resources, or by sale, the bank will calculate the IRD by comparing your rate, with the current rate for 2 years, and charge that on the balance to the end of the term. The estimate for 3 months interest is approximately 2 months worth of payments.

Additionally worth noting is that in the Bank Act, the maximum penalty that can be charged after the 5th anniversary is 3 months’ interest – so this is applicable for terms longer than 5 years.

Variable Rate Financing

We have variable prime based lending.

Prepayment Options & Mortgage Renewal

All of our lenders allow a prepayment percentage from 10 to 20%, based on the original amount borrowed. Some allow it only on the anniversary date, and some allow it cumulatively throughout the year. When any mortgage is up for renewal, you may pay off as much as you wish without penalty. The renewal process is very easy. As long as you are just renewing the balance, and not changing anything, you just choose a new term at whatever the prevailing interest rates are. There are no lawyers involved or re-qualifying procedures to go through. Please note, at the end of the term you are able to switch lenders if you are not getting a competitive offer – however by switching lenders, you will have to go through the re-qualifying process.

Many of our clients contact us at renewal, and we assist you with either switching lenders, or negotiating a better rate from your existing bank.