In 2015, CBC Marketplace aired a show about collateral mortgages. In this show, they highlighted that TD Canada Trust only offers collateral mortgages and unfortunately does not proactively provide their clients with enough information on the downside of these mortgages.
The episode went as far as to show hidden cameras in the TD Canada Trust branches speaking with staff about mortgages.
There are many plus sides to collateral mortgages however it is important that clients are aware of the downsides of collateral mortgages. An example downsides is having increased costs when trying to switch to another lender at renewal.
As someone who offers TD Canada Trust mortgages, as well as dozens of other lenders, I feel it is important to inform clients of the different terms of each mortgage, to help clients choose the right mortgage for their needs.
The Toronto Star also reported on collateral mortgages stating that these mortgages can trap you as well as your freedom to move will be constrained.
As client’s needs, finances and goals change frequently, it is important to have a mortgage that offers flexibility. Collateral mortgages can have possible challenges when changing lenders and when looking to obtain a private or second mortgage.
The Toronto Star also wrote an article called, “Loyalty doesn’t pay when it comes to mortgage renewals.” With the Bank of Canada also confirming in a study that, those who switched lenders at renewal or use the services of a mortgage broker, do save more than those who renew with their bank, it is very important that a client does not get restricted when trying to switch lenders at renewal.
If you are interested in a TD Canada Trust mortgage, I would love to review the pros and cons of a collateral mortgage and how these mortgages compare to conventional mortgages.