...a collateral lien could cost you more?

A collateral lien, as opposed to a standard charge, cannot be switched from one lender to another. At time of maturity you would have to pay for a new appraisal, legals and discharge fees if you would like to switch lenders. The lender with the collateral lien knows this and tends not to be competitive at renewal time because they feel that you as a borrower will be deterred from switching and incurring fees.

...penalties are calculated differently with every lender?

Some banks, when calculating the IRD (Interest Rate Differential), use their posted rate while other use their best discounted rate. This could literally save you thousands if you decide to break your closed term early.

...pre-payments may look the same from one bank to another but be different in nature?

Some banks will only let you pre-pay once a year; others on your anniversary day; a minimum amount; or a combination of all three making it less flexible and more expensive for you. It is like someone was to tell you “I know you owe me money and you can pay me a portion back today, but I would prefer if you paid me later so I can make more interest from you." However, there are some banks out there that will let you pre-pay any day and/or with more flexible options saving you money in the long run.

...that a quick closing could get you a better rate?

Lenders will sometimes give discounts on the rate if closing within 30 days rather than 120 days because rates are more predictable in the short term that in the long term or sometimes because they are simply trying to gain market share in a given month.

...that if features are not important you could get a lower rate?

When you are shopping for a mortgage you could lower your rate if features like pre-payments and penalties are not important to you.

...you can shave of years from your amortization just by switching to accelerated bi-weekly payments?

When you make accelerated bi-weekly payments you are in essence making two additional payments a year helping you reduce the amount of principal and the overall interest cost of your mortgage.

...you can get approved for a larger mortgage if you go with a 5 year fixed term?

When you choose a 5 year fixed term for your mortgage you can qualify by using the contract rate to determine payments. However, if you go with a variable term or a fixed term shorter than 5 years you would have to qualify using the Canada Benchmark Rate which is higher than discounted 5 year terms at the moment. This lowering the affordability and reducing the mortgage amount.

 

 

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