Dear Ontario Homebuyer,

Let me tell you a little story.

A young couple walks into a bank. Eyes wide. Hearts full. All smiles.

They’re buying their first home. And like everyone else, they ask:

“What’s the best rate you can give us?”

The banker grins. Smooth as butter. He quotes a number so low it makes their heads spin.

They don’t ask any more questions. They sign.

Fast forward two years, a job transfer, a surprise pregnancy, and boom — they need to move.

Now guess what?

They’re on the hook for $18,340 in penalties. That “low rate”? It just got a whole lot more expensive.

You see, kid…

Rate isn’t everything.

And if you don’t read this next part, you might get taken to the cleaners just like they did.

Prepayment Privileges – The Secret Sauce Nobody Talks About

Want to get rid of your mortgage faster? You need options.

The smart borrowers, the ones who knock years off their amortization, they use:

• Lump Sum Payments: Drop a fat chunk on the principal once a year.

• Double-Up Payments: Pay twice your normal payment with no penalty.

• Accelerated Payments: Go biweekly instead of monthly and save tens of thousands in interest.

Even $100 extra biweekly can save you $20K+ and shave years off your mortgage.

But here's the catch…

Not every lender lets you do this. Some handcuff you. Others let you run free. Know which one you’re dealing with.

Prepayment Penalties – The Booby Trap They Don’t Warn You About

Let me hit you with a stat:

65% of Canadians break their mortgage before the end of the term.

Why? Life happens. Job change. Divorce. Refinance. You name it.

Now pay attention…

• Variable-rate? You’ll usually pay 3 months’ interest. Not too bad.

• Fixed-rate? You could be hit with the IRD (Interest Rate Differential). This one can wreck you.

Some banks calculate IRD using “phantom discounts” off a posted rate no one actually pays. It's legal daylight robbery.

A $1,200 penalty? Now it’s $9,000. Boom.

Always, I mean ALWAYS, ask your broker how the lender calculates penalties.

Mortgage Registration Type – This One's Buried in the Fine Print

There are two ways lenders can register your mortgage:

1. Standard Charge

• Easy to switch lenders later.

• Gives you leverage at renewal time.

• Keeps the bank sweating.

2. Collateral Charge

• Harder (and more expensive) to move.

• Registers for more than you borrowed so they can lock you in or upsell you.

Don’t know which one you have?

Then you’re playing the bank’s game, not your own.

Portability & Assumability – Think Ahead or Pay Later

You won’t live in that house forever. So ask:

• Can I port my mortgage? Take it with you if you move.

• Can someone assume it? Handy when rates go up, your buyer takes your sweet rate with the house.

Both features can save you thousands and make your home easier to sell.

The Discounted Rate Trap – The Devil’s in the Details

That “low rate” the bank is advertising? It might be bait.

If it’s recorded as a “discount” off their posted rate, then guess what?

When you break the mortgage, they calculate the penalty based on the posted rate, not what you were paying.

Let me repeat that:

You’re penalized using a number you never saw or agreed to.

Don’t fall for it. That “too good to be true” rate might be a wolf in sheepskin.

THE FINAL WORD

Look…

Anyone can quote you a rate. It’s a number.

But the terms? The structure? The flexibility?

That’s where the real money is made, or lost.

You wouldn’t buy a Ferrari and leave the parking brake on, would you?

So don’t grab the lowest rate and ignore the fine print.

Be smart. Ask the right questions. Partner with someone who’s already stepped on the landmines so you don’t have to.

Ready to stop chasing numbers and start building real financial leverage?

👉 Book a free call with me. Let’s build a mortgage that actually works for you.

To your financial freedom,
Alan Borcic
Your Mortgage Broker Who Doesn’t Sugarcoat a Damn Thing