The Globe and Mail has published an article regarding some changes TD has made to new mortgages registered after October 18th 2010. I received a bulletin last week about the change TD Bank is making to the way they register a mortgage on the title to a property. Mortgages will now be registered as a collateral charge on title. The benefit to the consumer is that TD can now register a charge up to 125% of the home’s current value. This doesn’t mean you can access the 125%, it means that if property values go up and you want to get a line of credit or increased mortgage on your home it’s basically ready to go! The bank will do a few checks and balances before they approve it but the real savings for the consumer will be that they will not have to see a lawyer or re-apply for an increased mortgage.
The downside? This makes it much harder for you to switch banks when your term is up. Having less choice isn’t good for anyone! The article states, “unlike traditional mortgages, the collateral mortgages are difficult to transfer from one lender to another, because they must be paid in full to be cancelled. That means if someone wants to change lenders, they need to renegotiate from scratch”.
This recent move by TD has angered mortgage brokers across Canada according to the Globe and Mail article.
Read the full Globe and Mail article here:
TD overhauls mortgage program as housing market slows