At the beginning of March, the Government of Canada announced new measures to protect mortgage holders. The government introduced a voluntary code of conduct for mortgage prepayment information. This would ensure that more information is available to assist homeowners in making decisions about mortgage repayment. The code requires lenders to explain the differences among products including ways to pay off your mortgage faster without incurring penalties. It also requires the lenders to provide more information as to how they calculate prepayment charges if paying out a mortgage early...are they using a certain number of month's interest or the interest rate differential. The lender would tell the homeowner the amount of the charge, how they calculated it, the period of time the prepayment charge is valid and any other amounts the borrower must pay to the lender when they prepay their mortgage and how these amounts are calculated. The Financial Consumer Agency of Canada will monitor compliance.
Code of Conduct for Federally Regulated Lenders - Enhanced Mortgage Prepayment Information
- March 30, 2012
CENTURY 21 Fusion