A client recently brought in their renewal slip from TD. They had never missed a mortgage payment and were offered TD’s best rates….

The best five year rate they offered this client was 4.74% on a five year term. This is a far stretch from today’s best rate of 2.64% on a five year term. Let’s do an example based on a $200,000 mortgage, amortized over 25 years and a 5 year term with both interest rates. This will allow us to compare the difference in term interest cost and monthly mortgage payments. Scenario #1: They sign the dotted line at the bottom of this form and accept the 4.74% five year term; they would be paying $1,133.79 monthly for principle/interest and paying a total of $44,310.39 in term interest cost. Scenario #2: They speak with a mortgage broker and switch to a lender offering today’s best rate of 2.64% over five years; they would be paying $909.94 monthly and $24,346.85 in term interest cost. The difference is significant – they would be paying an additional $223.85 monthly and $19,963.54 over the five years. Their best move would be to speak with us so that we can put them with a new lender with the lower interest rate, then increase their monthly payment by $223.85 (goes directly on the principle) and pay off their mortgage quicker.