BIG SIX BANKS REPORT ‘OBSCENE’ RECORD $34.8 BILLION IN PROFITS FOR
2015...AND STILL COMPLAINING!
This heading is from ‘CanadaMortgageNews.ca’ and we think, is really a headline that
deserves some deep thought.
“RBC reported a $10 Billion annual profit for 2015, almost a third of the whole, gigantic
profit pie. Yet they are crying the blues and warning of troubled times ahead. (uh, that’s
the same speech they’ve made for the past 10 years) this article points out.
“Year after year after year the BIG SIX BANKS continue to report record profits and then
raise our banking fees, hire foreign temporary workers and fire Canadian employees,
and then use off-shore staff to cut their overhead and increase profits further.” All the
while, year after year raising ‘outlook’ concerns and the likelihood of rising rates.
Research shows that in fact BIG BANK PROFITS have grown collectively from $19.5
Billion in 2010 to over $34.88 Billion last year. This is a mind boggling increase of $15.3
Billion higher or approximately 75 per cent in just five years.
Our BIG BANKS ARE SO POWERFUL now that they ignore Bank of Canada efforts to
stimulate the struggling economy, but not passing on reductions in prime rate.
We suggest to you that a big part of this almost sickening profit scenario comes from
MORTGAGE PENALTIES. Such penalties used to be equal to 3 months interest. Today
through years of manipulation, bank mortgage ‘break’ penalties are roughly 4 times
more. Let’s think of this as a 400% increase shall we.
Ten years ago we were used to seeing penalties of $2,000, $3,000, $4,000. Today it is
not unusual to see $10,000, $15,000 even $20,000 plus. Can you imagine this
happening to you? Well it happens every day!
You see, people do not expect they will need to break their mortgage within the term
(most are 5 years) but life happens...job transfer, job loss, divorce, personal credit
problems, a better opportunity to move up (or down), and yes, death in the family. We
see it all. Consequently upwards to 40% need to break their mortgage AND OUCH!!!
Because BIG BANK PENALTIES ARE NOW SO HIGH, many have no choice but to stay
in the mortgage. Others are less fortunate get nailed. Big time!
Folks, your best protection against getting hosed is to seek out a reputable mortgage
company such as ours. Our lenders are both fairer and more competitive in terms of
rate and terms.
For your next mortgage need, please call us first!
Month: March 2016
YOU CAN TEST DRIVE A CAR, BUT YOU CAN’T TEST DRIVE A ‘BANK’
Imagine you know next to nothing about mortgages. All you know is what mom and dad
told you which is to go to the bank.
So you do and the smiling mortgage officer ask’s you a couple of questions, punches a
few keys and qualifies you for a $350,000 purchase price. You are offered what appears
to be an attractive rate of 2.99% with a discount of 1.70% below the bank’s ‘posted’ rate
of 4.64%. Most people are ‘Good to Go’ and never seek a second opinion.
Rate looks good to you but since you had your eye on a few properties in a somewhat
higher price range so you decide to check with a local mortgage broker.
The broker qualifies you for a purchase to a maximum a $425,000 but because both
incomes were used he/she recommends that you not to go above $385,000 in order to
leave a little ‘wiggle’ room for the unexpected. Along with this good advice the broker
also offers you an even better rate of 2.79%.
But the broker doesn’t stop there. He/she goes on to explain that the banks set a ‘trap’
for you by using ‘posted’ rate in their contract. This enables the bank(s) to charge you a
much higher penalty based on the difference between ‘posted’ rate and ‘contract’ rate if
you break your mortgage before end of term. No one ever thinks they will need to break
the mortgage but life happens and over forty per cent of Canadians do every single
year, and they make the banks rich.
We protect you by dealing with mortgage lenders who have much more reasonable
penalties, which typically are one quarter to one third less because our lenders do not
use ‘posted’ rates, at all. The truth is ‘posted’ rate is fiction since it has nothing to do with
anything, and it’s nothing more than an expensive ‘trap’ that can take a pound of flesh
Then there is the matter of bank ‘Collateral’ mortgages, another expensive ‘trap’ the
second (even more dangerous) trap. The real crime is that the banks do not inform you
and you never have any chance of reading the ‘fine print’ until it’s too late. Bank
mortgages today are not only unfair but they are also dangerous.
You wouldn’t buy a car without knowing and understanding the features would you? Of
course not. But every time you get a bank mortgage, that is actually what you are doing.
When you deal with a bank, they don’t tell you about the features because they don’t
want you to know about them. With us you are fully informed about the features.
So the next time you need a mortgage remember ‘You can test drive a car, but you can’t
test drive a bank mortgage.’ With us you can take a test drive and we’ll keep you safe!
ARE BANKS BECOMING MORE LIKE CASINOS?
While this is a simple question, the answer is much more complicated especially when it
comes to a mortgage.
Let’s start with the graphic of Mr. Potter (a former movie actor) which reads “THE
HOUSE ALWAYS WINS!” Well that is definitely true of both casinos and our banks as
well isn’t it?
If you think about it, the casino always tells you the rules. When you gamble at a casino,
you are informed and aware of what you are doing, right?. You also know what your
odds of success are.
When it comes to dealing with our banks you are at an even greater disadvantage
because you DON’T KNOW THE RULES (the Terms) OF THE GAME nor does the bank
fully inform or fully disclose important features you should be aware of. These features
can only be found in the fine print which you do not see until after the mortgage closes.
This is the lawyer’s closing package which comes months later.
Does this seem fair to you? For those of you frequent the casino, would you ever risk
your hard earned money if you didn’t know the rules? Highly unlikely right? Because it
would mean the equivalent of financial suicide wouldn’t it?
So why do 7 out of 10 Canadians still deal with and trust their banks when so much
more money (in the $100’s of thousands of dollars) is involved with a mortgage? The
reason probably lies with history more than anything else. ‘Old habits die hard’ as the
At least with a casino, it’s a level playing field because you know the rules and you take
your chances accordingly. With the banks it is not a level playing field. In fact the playing
field is full of potential, invisible pot holes. So how can you navigate around them when
you can’t even see them? You simply can’t can you?
If more Canadians realized that the risks involved when getting a bank mortgage can
actually be compared to gambling at the casino, would they take that chance? The
‘game of chance’ should only apply to gambling don’t you think?
For your next mortgage, if you want an honest, trustworthy, transparent and ‘feel good’
experience that gives you all the facts/information you require, please call us first and
have our team of caring professionals provide you with the best financial solution you
have ever had.