Why are the terms more important than the rate when it comes to a mortgage?

It’s simple – 7 out of 10 Canadians break their mortgages prior to the renewal date.
Accepting a mortgage from the wrong lender when you could have qualified for a better one is a very costly mistake.

The biggest mistake anyone can make is thinking that they’re the 3 in 10 that won’t break their mortgage.

For those people, I give you a short list of potential reasons why you might need to get out of a mortgage early.

1. Sale and purchase – maybe you get an offer you can’t refuse – work or real estate related. Maybe the zoning has changed, your neighbours or strata are unmanageable or maybe you just want to grow your family.
2. Take Equity out – maybe you need to get some renovations done, help family members, purchase another investment, pay CRA or assessments on the property.
3. Pay off debt – maybe you are like over 60% of Canadians living paycheque to paycheque and paying over 5% on credit cards or lines of credit. There are much more savings in interest and cash flow when utilizing your equity.
4. Relationship changes – divorce is at a 50% rate these days or maybe you’re on the more positive side and getting married or moving in together. Having children could also require more space (oops we’re having twins!).
5. Health or life challenges – major illness, unemployment or death of someone on title can be a burden enough.
6. Removing someone from title – a co-signer (3/10 homebuyers get help from a family member) or an ex-spouse.
7. Save money with a lower rate – the market is always changing. It may make sense to break early and go with a different term as the market changes. Having the flexibility to do so is a major advantage.
8. Pay it off – maybe you won the lottery or got an inheritance.

Some of the above are not avoidable but the one thing you totally can control is who you align yourself with when shopping for a mortgage. A Dominion Lending Centres mortgage broker will always be looking at all the factors involved in a mortgage without bias to help you make an educated decision on what best suits you.