Today in broker news, we were told that a recent poll by TD Canada Trust found that 89 per cent said being able to make additional lump sum payments or weekly or bi-weekly payments was important to them.
In addition, the survey also revealed that 75 per cent of Canadians would like the ability to defer or reduce their monthly mortgage payment in the case of an unexpected event or shortfall. As well, 60 per cent would be more likely to make a lump sum payment to pay off their mortgage faster if that gave them the flexibility to pay less at a later date if something unexpected came up.

This afternoon, TD Canada Trust announced that they would add a flexibility feature to their mortgages to make them more attractive to clients.
Why are they do this? Recently, TD Canada Trust decided to change the charge on title for their mortgages from a regular mortgage charge to a collateral charge. They are now registering a charge for up to 125% of the value of your home to allow for future lines of credit when the house value goes up. Unfortunately, this means it's very difficult to get out of a TD mortgage if you decide you want to refinance, low size or anything else before the end of your term. Every mortgage broker I know has stopped sending mortgages to TD as a result.
If they think that this will help to increase their business they are wrong.
Most lenders offer the opportunity to change from monthly to bi-weekly payments. Most will also allow a "miss a payment" option as well. Frankly I don't see TD offering the consumer anything they do not already have available to them from a variety of lenders.
As to the pre-payment privileges, offering 20% pre-payment is a waste for most consumers. With housing prices in the $400K range, the maximum that I have seen people using is 5% and this is a privilege that people pay for !.
As a matter of a fact, I have one lender who will lower the interest rate if you want a lower pre-payment privilege. Who great is that?
Contact me if you want more information at my website or call me at 403-836-1201.