The Big Banks didn’t get to be Big without thinking about every angle they can bring in more profit. Another detail you will likely be unaware of is the new “Collateral Charge” which looks shiny and nice on the outside, but much like the Hotel California, “you can check out, but you can never leave!”
Well, you can leave, but it will cost you.
This charge is sold on the benefit that if the client ever wants to borrow more money, they can simply go to the branch and they will use this collateral charge to secure those funds against your home instead of having to get a regular loan or refinance their mortgage (saving legal fees). The trouble is other lenders won’t allow you to transfer your mortgage from that lender due to this charge, so then you will have to go to the lawyers and refinance…in other words, the Bank is trying to make it more difficult to leave, lessening your negotiating power.
There is a great article here discussing it in depth: Pros & Cons of Collateral Mortgages
As always, there is much more to talk about than just the rate of a mortgage.
Michael Anthony Lloyd