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Interest rates are down – should you break your mortgage?

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(NC) The pandemic is causing many of us to re-evaluate our finances. If you are thinking of renegotiating your mortgage to take advantage of a lower interest rate, be aware that this could mean having to break your mortgage contract.

If you break your mortgage contract you may have to pay a fee, called a prepayment penalty.

Before breaking your mortgage, make sure the benefits outweigh the costs. Far too many homeowners who have broken their mortgage contracts have been shocked by penalties amounting to tens of thousands of dollars, or other fees required to complete the transaction.

Know the costs

Every mortgage contract contains different terms and conditions. Federally regulated financial institutions must provide you with key information in a box at the beginning of the mortgage agreement, including information about any penalties and fees that will apply if you break your mortgage contract.

As a consumer, you have the responsibility to read your mortgage agreement and understand the penalties and fees associated with breaking your mortgage contract. Call your financial institution to speak to a knowledgeable person for detailed information on prepayment penalties or check out the prepayment penalty calculator available on their website.

Consider other options

Some mortgage lenders may allow you to extend the length of your mortgage before the end of its term to take advantage of a lower interest rate. With this option, you don’t have to pay a prepayment penalty. Lenders call this option the blend-and-extend, because your old interest rate and the new term’s interest rate are blended. Keep in mind that you may need to pay administrative fees.

Depending on the cost to break your mortgage, it may be best to wait until the end of its term and shop around for a new contract that provides a lower interest rate or more flexibility.

The Financial Consumer Agency of Canada provides unbiased and fact-based information on mortgages you can count on. You can learn more about the costs of breaking your mortgage at canada.ca/money.

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New home? Prepare for the unexpected

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(NC) Buying a house, getting married or having your first baby are all major life events that are likely to affect your finances. But whether you’re in the midst of a major life event or not, it’s important to check in on your finances regularly to maintain good financial health.

Your financial health encompasses things like your spending, savings, borrowing and future financial plans. It also means dedicating a set amount of savings for unexpected future events. It can even include optional credit protection insurance, such as TD protection plans, to help cover your debt balances in case of death, a covered critical illness or total disability.

Even though it can be tough to think about the unexpected, life is unpredictable and it’s important to plan for the unexpected. Find more information at td.com.

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Mortgage pitfalls to avoid

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(NC) Throughout life, you may have moments where you’ll make a large purchase or invest in a costly item, like your family home. But whether you’re in the market for your first new property or already have a mortgage, leaving this asset unprotected can be costly.   

Insuring your housing financial debt, as well as debt for other big-ticket items like a new boat for your lakefront cottage or keepsake jewelry like an engagement ring, is a smart investment in your well-being.

To help protect your debt balances like a mortgage, your bank may have optional credit protection insurance products.

“Your home is one of your biggest assets, yet illness can happen at any stage of life. Worrying about your mortgage when the focus should be on health isn’t a situation anyone would wish for,” explains Shirley Malloy, vice president at TD. “Fortunately, we offer mortgage protection to provide coverage for your outstanding balance should you face a covered critical health event.”

Mortgage protection can be purchased whether you’re in the process of applying for a mortgage or already have a home financing solution. But what about protection options for credit card debt?

“Given the unprecedented circumstances of this year, many Canadians are trying to plan for the unexpected to protect themselves and their finances,” says Malloy. “TD balance protection plus is an optional product designed to help you deal with your credit card payment obligations in the event of a covered event, such as loss of employment.”

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Is your internet too slow? It’s probably not you

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(NC) We all know the aggravation of a school lesson that just won’t stop freezing or the family video call that looks more like a photo montage. And, as we adjust to the impact of COVID-19 on our day-to-day, that slow connection can have frustrating consequences.

Working from home and learning remotely, both need fast, stable internet, something not enough Canadians have yet. Even if you have fast devices in your home, if the infrastructure in your area is not optimal, your connection won’t be either.

Right now, cities have the infrastructure needed to ensure access. But rural and remote communities are hugely underserved, with fewer than half having high-speed internet, and fewer than a third of households on reservations have high-speed connections.

Fortunately, change is coming. The Universal Broadband Fund is backing projects across Canada right now to ensure the reliable, high-speed internet connections families need to work, study, access services online, and safely stay in touch with each other.

The fund existed before COVID, but as a response to the pandemic, its timetable has been moved up by four years to a target of 98 per cent of Canadians with high-speed internet access by 2026. With the faster pace, at least 90 per cent of us should be connected by the end of 2021.

The fund is focused on improvements in rural and remote communities across Canada to fix the disconnect between internet access for urban and rural households.  This means more remote work opportunities, better access to remote learning and safer access to healthcare, no matter where you live.

It’s not just for good connections at home, either. The improvements mean much better access to mobile networks on highways between remote communities. The result is better, safer navigation and access to emergency services for your family, even on the road in the middle of nowhere. Mobile projects will be focused on serving Indigenous communities and the roads leading to them.

The shape these improvements will take in your area will depend on where you live. Canada is huge, and its communities are hugely diverse, with diverse needs. Keep an eye out for local projects — they’re a small part of something much bigger.

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