HawthorneVillager.com

I left TD Canada Trust when they screwed clients by making all new mortgages collateral only to find that ING who I then went with has now gone and done the same. So when my term in the late Spring comes due with ING I can only keep my standard mortgage if I just due a renewal but if I go to refinance by buying another property as we're considering I have to take a collateral if I stay with them. Guess who will be looking around for a new lender? lol Before you know it all the lenders are going to be locking us in to these collateral mortgages.

Yes I remember talking to you, I'll probably be in touch if we don't just end up renewing instead of selling.

I didn't realize TD changed their mortgages. Only saw it on CBC marketplace talking about collateral mortgages. Didn't get into the details but for someone that doesn't intend on increasing the loan amount, just wants best rate, good prepayment options and best capability to negotiate at the end of term this is likely my last TD mortgage. It's a pity as I've found them to be a good and easy lender to deal with but don't like that costs to exit if they can't give me a competitive rate on renewal.

Couldn't agree with you more & now the bank we left them for (ING) is now going collateral too & RBC is also. Soon there will be hardly any conventional mortgages left - what a shame.

Hi, could you please explain this collateral mortgage, we have a home equity line of credit with TD but I don't remember ever seeing or hearing that word. Thanks.

I copied the following from the Toronto Star you can also google the Pitfalls or Negatives of Collateral mortgages for more info:

"The advantage to the bank is that a collateral agreement makes it harder for you to leave because it interlocks your lending. As Toronto real estate lawyer Mark Weisleder, a Moneyville columnist, points out, a collateral mortgage secures all debt held with that lender under one agreement. So a line of credit, a credit card, car loan or any personal loan will all be secured by the same agreement.

Most banks do not allow transfers of collateral mortgages because they are tied to other consumer loans. This means that at the end of your five-year term, you have to pay discharge fees to get out of one mortgage and additional fees to register a new one at another financial institution. On the other hand, a conventional mortgage is easy to transfer when the term is up.

Another difference is that in a conventional agreement your rate cannot be increased during the term, even if you default or fall into arrears with your payments.

With a collateral mortgage, if you go into arrears or default, the bank has the right to raise your interest rate by up to 10 percentage points.

This is because a collateral mortgage is registered at a charge of prime plus 10 per cent. Senior TD Bank mortgage official Farhaneh Haque says the this higher rate is charged to protect customers from incurring more legal and administration fees when they want to borrow more. Without this, the bank would have to reregister the loan when you want to borrow more. Since the loan is already registered at this higher rate, when you qualify, the bank can offer it to you with no questions asked, even if the loan is 10 points higher."

If anyone has any specific questions re: collateral mortgages feel free to give me a call. I'm happy to explain. 647-292-7597.

_________________
Christina Jackson
Mobile Mortgage Specialist
TD Canada Trust
T: 647 292 7597
F: 905 377 1634
P: 866 767 5446
email: christina.jackson@td.com