BUSTING The Banks-Collateral Mortgages

General Angela Calla 25 Oct

A major TV news program calls out TD Canada Trust’s collateral mortgage.  CBC Marketplace aired an episode called ‘Busting the Banks’ on January 25th.  If you want to skip to the video link, just click here and scroll to the 8:00 min mark.

During the program, CBC took a hidden camera into a TD branch….the reporter posed as a potential mortgage borrower….   Only when questioned for the 4th time did the TD banker disclose their mortgage was a collateral charge….  but they didn’t seem to explain the difference between a conventional mortgage and a collateral mortgage… The Banker only agreed that the collateral charge was a disadvantage.

The CBC reporter also produced TD mortgage documents obtained at the branch.   After a thorough search, they couldn’t find the word ‘collateral’ anywhere.   The only place they could find the word ‘collateral’ was in one document sent to the lawyer during mortgage registration.   Of course, the big problem here is that most lawyer’s get mortgage instructions from Banks around one to two weeks before closing….  A bit too late to start shopping for a new mortgage.  Leaving the consumer with no option but to proceed with the TD collateral mortgage.


Collateral mortgages are more commonly used when obtaining a secured line of credit…. or a product that has revolving credit with no set amortization.  There are several other differences that affect what your current and future options will be (more on this later).  A collateral mortgage has it’s place but for the vast majority of us, I believe it’s just not the right product. The biggest problem I have is that most borrowers are unaware of what they are getting into.

Back in October 2010, TD quietly announced they would begin registering all their mortgages as collateral mortgages.   http://www.angelacalla.ca/blog_post?id=8190  the differences between collateral and conventional mortgages….  Does anyone remember this?  At the time, this was a huge story….  and yet, there was hardly no coverage…. Maybe the hundreds of millions that the BIG SIX BANKS spend in advertising each year has something to do with the lack of coverage.?

I could be wrong but my feeling is that since October 2010, the majority of TD clients have no idea their mortgage is registered as a collateral charge…..they will only find out once they go to refinance, renew or make a change with their mortgage…

I applaud CBC Marketplace for taking on the BIG SIX BANKS…..and my advice is to anyone needing a mortgage is to speak to an unbiased advisor.

TD is not the only lender doing this, they just happened to be the lender CBC showcased. It is common for the credit unions as well as sometimes with aby of the big banks HSBC, CIBC, RBC, Scotia, BMO. It’s an option for some cases without question; its just very importnat for there to be transperency in the products you select and to be aware of all the the pro’s and cons.

As always we are here to help callateam@dominionlending.ca 604-802-3983



3 takeaways from the BOC this week

General Angela Calla 24 Oct

The Bank of Canada has kept interest rates low for 3 years now and while rates are low, reading between the lines make the following the top 3 take aways

1. The forcast is downgraded. This means they intend to keep there rate low, longer.

2. The variable rate mortgage will continue to be a great option for borrowers.

3. They may consider a decrease in future, as they removed the increase warning.

To ensure you have the best possible mortgage contact the Angela Calla Mortgage Team 604-802-3983 callateam@dominionlending.ca

To read more about the Bank of Canada this week see the link http://www.theglobeandmail.com/report-on-business/economy/do-not-post/article15015655/ 

4 points to know about mortgage portability

General Angela Calla 15 Oct

Selling your current home and moving into a new one can be stressful enough, let alone worrying about your current mortgage and whether you’re able to carry it over to your new home.

Porting enables you to move to another property without having to lose your existing interest rate, mortgage balance and term. And, better yet, the ability to port also saves you money by avoiding early discharge penalties.

It’s important to note, however, that not all mortgages are portable. When it comes to fixed-rate mortgage products, you usually have a portability option. Lenders often use a “blended” system where your current mortgage rate stays the same on the mortgage amount ported over to the new property and the new balance is calculated using the current interest rate.

With variable-rate mortgages, on the other hand, porting is usually not available. As such, upon breaking your existing mortgage, a three-month interest penalty will be charged. This charge may or may not be reimbursed with your new mortgage.

Porting conditions
While porting typically ensures no penalty will


be charged when you sell your existing property and buy a new one, some conditions that may apply include:

  • Some lenders allow you to port your mortgage, but your sale and purchase have to happen on the same day. Other lenders offer a week to do this, some a month, and others up to three months.
  • Some lenders don’t allow a changed term or force you into a longer term as part of agreeing to port your mortgage.
  • Some lenders will, in fact, reimburse your entire penalty whether you’re a fixed or variable borrower if you simply get a new mortgage with the same lender – replacing the one being discharged. Additionally, some lenders will even allow you to move into a brand new term of your choice and start fresh.
  • There are instances where it’s better to pay a penalty at the time of selling and get into a new term at a brand new rate that could save back your penalty over the course of the new term.

As always, if you have any questions about mortgage portability or your mortgage in general, I’m here to help!

Angela Calla Mortgage Team





Want to see how 64% of homeowners plan to renovate?

General Angela Calla 15 Oct

Some 65% of Canadian homeowners are planning renovations in the next 12 months and expect to spend an average of $8,992 according to the recent Scotiabank Home Renovations Poll.

 Among the provinces, homeowners in Manitoba and Saskatchewan are the most likely to renovate (74%) in the next year and plan to spend the most with an average spend of $12,920. The province least likely to renovate in the next 12 months is British Columbia (55%), with homeowners planning to spend the least at $5,700.


For those planning renovations in the next 12 months, the most popular method to pay for their project is cash savings (73%), followed by a line of credit (25%) and credit cards (16%).


Men are more likely than women to use cash savings (77% vs 68%), with home owners in Atlantic Canada (81%) and Saskatchewan and Manitoba (80%) being the highest among the provinces to choose this payment method.


Interestingly, one in four (25%) homeowners planning to renovate in the next 12 months indicate they do not have a renovation budget.


Click here to read the full Scotiabank press release.

Questions on financing your renovations?


Angela Calla

Dominion Lending Centres

callateam@dominionlending.ca 604-802-3983