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Larger down payment can mean a higher rate by Angela Calla

General Angela Calla 8 May

A diligent saver who demonstrates the ability to put more money down should get the best mortgage terms, right?

This isn’t the case lately! Lenders are providing specials for mortgages that are insured because they can sell those loans and have more money to lend. If you have a larger down payment (20% or higher), you may be offered a mortgage rate that’s 10-50 basis points ($10-50 more per month on an average mortgage) as the lender doesn’t have as much flexibility to use that loan to leverage into lending more money to someone else.

When you do the math, you’re further ahead making a larger down payment. If you have the funds available, it’s great to be in a position to avoid the premium. If you’re looking to refinance, a premium would be considered if it allowed you to pay off high-interest debt using your accessible equity.

Three things to remember:

1. There are no freebies. Sound familiar? This notion always applies to your mortgage as “no-frills” rock-bottom rates always cost you somehow. The Angela Calla Mortgage Team works out all the scenarios for you to ensure the best mortgage strategy is in place, including the best rate.

2. The banks are passing down costs to consumers. Although making record profits, if banks’ costs go up, so will yours. The Angela Calla Mortgage Team is there for the life of your mortgage so we can proactively prepare your mortgage for you (which is a standard approach when we arrange your mortgage at no cost to you).

3. This makes the 10-year fixed-rate mortgage more attractive than ever. No one wants to be a victim to timing or policy change when your mortgage is up for renewal. And with these changes suggested over the next year, where banks may charge more when you owe and they may choose to re-qualify you at renewal and offer a higher rate if your situation is any different, the 10-year is a great way to put your mind as ease. For more about the 10-year fixed-rate mortgage option, visit: 

Remember: when you know better, you do better. The Angela Calla Mortgage Team is here to help you with the best mortgage strategy, education and guidance throughout the life of your mortgage. We’ll help you control what you can in the marketplace. We are not rate quoters – we are planners that believe in empowerment with knowledge as we represent the best options for our clients over the long term.

 Always here to help!

 Angela Calla, AMP

Dominion Lending Centres-Angela Calla

Host of ” The Mortgage Show” Saturdays @ 7pm on CKNW AM980 Phone :

604-802-3983 Fax: 604-939-8795