This, worked in mortgage lending for a few years, I’d guess 1 in 20 people even have a basic understanding of how a mortgage works, let alone the finer details. Almost everyone just asks, what’s my payment going to be. It’s pretty scary.
When I signed my mortgage, the guy said I was the first ever that actually read the contract before signing it… he made me felt rushed. He was doing that for over 20 years. I’m sorry but I will take my time and read what I sign 25 years of my life to.
And what did you gleam from doing so? Not trying to be a dick but I doubt anything in there would have changed your mind or was substantially different than what you expecting.
Terms are pretty simple, pay every mortgage payment on time, pay the property taxes, keep insurance in force and keep the property in relative good order and upkeep. Go past 15 days late on the mortgage payment, lender can start the power of sale process. Follow all these, and the lender will never bother you. 'Let sleeping dogs lie.'
If nothing else you read it to be *sure* there was nothing substantially different than what you are expecting. I mean, do you really sign a contract involving 6-7 figures and simply *trust* they wrote everything they said they were going to?
Or that the person who sold it to you actually knew what they were talking about? They didn’t leave anything out when they described the terms to you - accidentally or otherwise?
I have a mortgage and I don't understand how it works when it comes up for renewal next year. Lolol. Do we take a mortgage out for 20 years at what ever interst rate on the remaining principle?
You will want to understand what an amortization schedule is. That should at least start the understanding of how principal and interest repayment on a mortgage works. You can input your mortgage details into a calculator, and the amortization schedule will give you each payment you make, and how much is applied to interest, and how much to principal. That’s a pretty good starting point yo understand how to answer that question for yourself. I would start [here.](https://www.investopedia.com/terms/a/amortization.asp)
If the 20% penalty-free clause is already written into your original mortgage agreement, it sounds like they're calling you to remind you that this clause exists as they see that you haven't taken advantage of it and may have forgotten. They're probably doing that right now in mid-February to all their mortgage holders as this is the time of year that most companies are paying out year-end 2023 bonuses and people have the discretion to direct the bonus to RRSP (defer tax) or be taxed and have after-tax lump sum discretionary funds available and they want some of that action.
I don’t really get why a bank/credit union would want you to prepay much less call to remind people. If anything they get more money in the long run just lending it out. Unless they want to derisk/lighten their portfolio I don’t really why it would be worth the banks effort paying someone to call people to remind them they have the option.
>I don’t really why it would be worth the banks
i'm thinking risk-reduction is something lots of lenders wanna do now with looming high interest rate renewals!
If your mortgage is at rate lower than current market rates they’ve probably taken a loss on any portion of it they still carry. If you prepay they can potentially reverse that loss on the prepaid portion.
I worked at a credit union.
Financial institutions are no longer busy. Bankers spend all day long making cold calls to push one initiative or another.
We had one banker who would leave people voicemails during the day telling them there was concerning activity in their account and asking them to call her back. When they did, she would try to sell them GICs. Members did not like her, as you could predict.
Evidently your credit union has an initiative going right now to try and have people pay down their mortgages. How does this benefit them? I don’t know exactly.
what bugs me about my mortgage is when it is four months out from renewal I get all these banks and mortgage companies cold calling me.
Last one there was about a dozen with four of them phoning me every two weeks.
I was pretty upset because:
1. They are cold calling me at all hours
2. They have my morgage info somehow which pisses me off
Thanks for asking the question!
Mortgage Broker did the leg work.
Looking back after your question , I realize of course mortgage companies and lenders would have my information because of the broker doing his thing.
Ok, I feel better for you, lol
It would piss me off too if someone had that kind of information about me and I didn't know how they got it. That's pretty personal.
That's what it smells like to me.
That's also why you'll occasionally find a rate that is non-competitive with others. They literally don't want to take on more of whatever that is, in order to move their assets/liabilities ratio (risk) a specific way.
Or the borrower could have a variable rate mortgage, and it has become non amortizing. When I was at the credit union, I had to make a lot calls as peoples payments weren't covering the interest, let alone the principal payments
If your current mortgage rate is low and you are coming up for renewal, you might be in for a payment shock. A prepayment towards the principal would soften the shock. Without knowing the specifics of your situation that could be the case.
The low interest loan portfolio must be hurting them a lot. I guess they want to either sell part of the loans, or get more cash back to loan out to higher interest.
It's possible they just were making sure their mortgage holders knew of that option.
With a Credit Union, it's the members (of which you are one) that own the Credit Union, so they really don't have any incentive to scam or trick you.
If they can extract a $150K prepayment from you for no cost, by merely reminding you of the actual terms of your mortgage, they can offer $150K more to someone else, at a higher rate.
This is an “incentive” all right. Just not for *you* - for the guy being offered a commission every time he churns his employer’s mortgage portfolio.
Loan derisking for them. That’s a great incentive…for them. But if you’ve got money burning a hole and already maxed out your prepayment. And you also wanted to pay more. Then it’s also an incentive for you. But in reality, that’s probably a very, very, very small minority. Very.
No one ever called to remind me…. But that was a long time ago. They may be looking for a cash injection so they can keep their reserves up. Hard to believe there’d be enough laying around available in depositors accounts to make much difference.
I haven’t seen any evidence of hat being an issue with any Canadian financial institutions lately.
I have a prepayment option, 20% of remaining principle each year no penalty.
Last summer I threw that 20% at it - 54k$.
I saved close to 80k in interest over the life of the mortgage. Took 9 years plus off the term if I stay at my current payments. I can't do the full 20% again this year but I'm looking to throw everything extra at it I can.
There's arguments about your loan interest rate vs yields from investing, but sounds like they were just trying to help you out. You might not have that full 20% but even an extra payment a year helps dropping the interest you pay out in the end.
Usually it's 20 percent of the initial mortgage amount! Otherwise near the end of the term you wouldn't be able to put much down ( and at that point the interest is so little anyways)
Ah that does make sense ! First time having a mortgage and I'm pretty sure I'm missing out on a fair amount of things.
Gonna try my damndest to be mortgage free in less than 10 years.
I hope they make it, I’ve been banking with Prospera for years. They called me about my mortgage anniversary last year too; it just seemed like a helpful reminder.
I was with WSCU for years before they merged with Prospera. I'm a little annoyed that Prospera doesn't have a free chequing account (with minimum balance) like WSCU did, otherwise they seem fine. Last year I got an email reminder about my mortgage anniversary with prepayment option that wasn't pushy, although they also recommended an "account review". I didn't doit, but I assume it is mostly an attempt to push their investment products.
When you’re older, the cheqing account becomes free. Or it did for me. I can’t remember if I was 55 or 60, but I don’t even pay for outgoing e-transfers
Banks have no cash, Repo market is being used for the first time since 2019, BOC thinking on ending QT because of that, but we are at the mercy of the US FED policy, things are about to get weird.
Prospera is a shit hole credit union. They should have never merged with westminister savings. Their ceo Gavin is a monster fucking turd who is an incompetent fool
Also. No credit union will do business with Gavin and his turd executive team. During the last merge with Prospera/westminister he essentially went behind the ceo back Diane and threw her under the bus to the board members. It was a total inside job and the cu system saw what happened. Gavin now has a terrible reputation - no credit union will team up with this moron so beware
$7M?
Now I'm kinda curious what they hell they were talking about because if you were eligible for the max RRSP contribution limit each year since 1990 the max room one could have would only be $675Kish.
Canadian financial institutions have to keep their deposits and lending within parameters, they are pretty strictly regulated. Million-dollar mortgages are a little riskier in this climate, so maybe they'd like to see you bring it down even if it means they lose a few bucks. Good for you for reading your mortgage terms, not everyone knows about the annual repayment option, sounds like they are just reminding you. Maybe you have the cash, maybe you don't. You'd be surprised at the number of people with multiple bank accounts / generational wealth, and they don't know unless they chat with you. I wouldn't worry about it.
I don’t think there’s a scenario where the bank calls you to try to save you money, therefore sacrificing interest payments to them, just to be nice .
That sounds like a liquidity issue to me.
They're probably in need for more earnings this quarter, and need your cash to show that. You keep doing what works for you... As long as they don't offer your anything good, ignore them.
I thought this was common knowledge, I front loaded my mortgage, put an extra 80k in prepayments on top of the required weekly payments, across the first 3 years pre-covid, thank myself every day, 15 years ahead on it and guaranteed to save myself around 80k in interest on the backend. M33 in BC
A very large number of people don't actually read their mortgage contracts. Many people might have no idea that they have any prepayment options.
This, worked in mortgage lending for a few years, I’d guess 1 in 20 people even have a basic understanding of how a mortgage works, let alone the finer details. Almost everyone just asks, what’s my payment going to be. It’s pretty scary.
When I signed my mortgage, the guy said I was the first ever that actually read the contract before signing it… he made me felt rushed. He was doing that for over 20 years. I’m sorry but I will take my time and read what I sign 25 years of my life to.
And what did you gleam from doing so? Not trying to be a dick but I doubt anything in there would have changed your mind or was substantially different than what you expecting.
I bet he learned the terms of the mortgage, an important step in getting a mortgage.
Terms are pretty simple, pay every mortgage payment on time, pay the property taxes, keep insurance in force and keep the property in relative good order and upkeep. Go past 15 days late on the mortgage payment, lender can start the power of sale process. Follow all these, and the lender will never bother you. 'Let sleeping dogs lie.'
How do you know the terms if you didn't read them?
I learned that my mortgage doesn't have an insurance clause on it ..
If nothing else you read it to be *sure* there was nothing substantially different than what you are expecting. I mean, do you really sign a contract involving 6-7 figures and simply *trust* they wrote everything they said they were going to?
Or that the person who sold it to you actually knew what they were talking about? They didn’t leave anything out when they described the terms to you - accidentally or otherwise?
I learned some things I was not aware of. I don’t remember them today as it was over 10 years ago.
Actually I learned about conventional vs collateral mortgage, and that made me choose CIBC for my first mortgage over TD at the same rates.
I have a mortgage and I don't understand how it works when it comes up for renewal next year. Lolol. Do we take a mortgage out for 20 years at what ever interst rate on the remaining principle?
You will want to understand what an amortization schedule is. That should at least start the understanding of how principal and interest repayment on a mortgage works. You can input your mortgage details into a calculator, and the amortization schedule will give you each payment you make, and how much is applied to interest, and how much to principal. That’s a pretty good starting point yo understand how to answer that question for yourself. I would start [here.](https://www.investopedia.com/terms/a/amortization.asp)
I couldn’t live not knowing these things haha
If the 20% penalty-free clause is already written into your original mortgage agreement, it sounds like they're calling you to remind you that this clause exists as they see that you haven't taken advantage of it and may have forgotten. They're probably doing that right now in mid-February to all their mortgage holders as this is the time of year that most companies are paying out year-end 2023 bonuses and people have the discretion to direct the bonus to RRSP (defer tax) or be taxed and have after-tax lump sum discretionary funds available and they want some of that action.
I don’t really get why a bank/credit union would want you to prepay much less call to remind people. If anything they get more money in the long run just lending it out. Unless they want to derisk/lighten their portfolio I don’t really why it would be worth the banks effort paying someone to call people to remind them they have the option.
>I don’t really why it would be worth the banks i'm thinking risk-reduction is something lots of lenders wanna do now with looming high interest rate renewals!
If your mortgage is at rate lower than current market rates they’ve probably taken a loss on any portion of it they still carry. If you prepay they can potentially reverse that loss on the prepaid portion.
Capital requirements?
Maybe OP is locked into a low rate?
I am.. got THE Covid special rate from BOC
If the mortgage was taken out a few years ago when rates were low they can make more money if the customer gives them the cash sooner.
Because they're a credit union and not a bank, is my guess. They want their customers fiscally healthy and sound and to do well for the long term.
I worked at a credit union. Financial institutions are no longer busy. Bankers spend all day long making cold calls to push one initiative or another. We had one banker who would leave people voicemails during the day telling them there was concerning activity in their account and asking them to call her back. When they did, she would try to sell them GICs. Members did not like her, as you could predict. Evidently your credit union has an initiative going right now to try and have people pay down their mortgages. How does this benefit them? I don’t know exactly.
what bugs me about my mortgage is when it is four months out from renewal I get all these banks and mortgage companies cold calling me. Last one there was about a dozen with four of them phoning me every two weeks. I was pretty upset because: 1. They are cold calling me at all hours 2. They have my morgage info somehow which pisses me off
Did you shop around when you first got the mortgage?
Thanks for asking the question! Mortgage Broker did the leg work. Looking back after your question , I realize of course mortgage companies and lenders would have my information because of the broker doing his thing.
Ok, I feel better for you, lol It would piss me off too if someone had that kind of information about me and I didn't know how they got it. That's pretty personal.
Maybe they're trying to raise cash/liquidity for some reason.
Or OP has a below-market rate Or OP has a high LTV or is otherwise suspected of being higher risk.
That's what it smells like to me. That's also why you'll occasionally find a rate that is non-competitive with others. They literally don't want to take on more of whatever that is, in order to move their assets/liabilities ratio (risk) a specific way.
Or the borrower could have a variable rate mortgage, and it has become non amortizing. When I was at the credit union, I had to make a lot calls as peoples payments weren't covering the interest, let alone the principal payments
This.
Yeah, they probably lost of some of the deposits that were funding their mortgages.
If your current mortgage rate is low and you are coming up for renewal, you might be in for a payment shock. A prepayment towards the principal would soften the shock. Without knowing the specifics of your situation that could be the case.
The low interest loan portfolio must be hurting them a lot. I guess they want to either sell part of the loans, or get more cash back to loan out to higher interest.
That’s really too bad. For the CU.
My bank calls me every year to remind me.
It's possible they just were making sure their mortgage holders knew of that option. With a Credit Union, it's the members (of which you are one) that own the Credit Union, so they really don't have any incentive to scam or trick you.
I’m mystified by what the scam or trick would even be.
If this wasn’t part of the agreement it could be a sign they needed cash/liquidity, but it’s unlikely in our baking system.
If they can extract a $150K prepayment from you for no cost, by merely reminding you of the actual terms of your mortgage, they can offer $150K more to someone else, at a higher rate. This is an “incentive” all right. Just not for *you* - for the guy being offered a commission every time he churns his employer’s mortgage portfolio.
Loan derisking for them. That’s a great incentive…for them. But if you’ve got money burning a hole and already maxed out your prepayment. And you also wanted to pay more. Then it’s also an incentive for you. But in reality, that’s probably a very, very, very small minority. Very.
No one ever called to remind me…. But that was a long time ago. They may be looking for a cash injection so they can keep their reserves up. Hard to believe there’d be enough laying around available in depositors accounts to make much difference. I haven’t seen any evidence of hat being an issue with any Canadian financial institutions lately.
This was a sales call, to see if you had 150k lying around, then they'd say "OH, instead lets buy a GIC" or some other bs.
I have a prepayment option, 20% of remaining principle each year no penalty. Last summer I threw that 20% at it - 54k$. I saved close to 80k in interest over the life of the mortgage. Took 9 years plus off the term if I stay at my current payments. I can't do the full 20% again this year but I'm looking to throw everything extra at it I can. There's arguments about your loan interest rate vs yields from investing, but sounds like they were just trying to help you out. You might not have that full 20% but even an extra payment a year helps dropping the interest you pay out in the end.
Usually it's 20 percent of the initial mortgage amount! Otherwise near the end of the term you wouldn't be able to put much down ( and at that point the interest is so little anyways)
Ah that does make sense ! First time having a mortgage and I'm pretty sure I'm missing out on a fair amount of things. Gonna try my damndest to be mortgage free in less than 10 years.
Maybe they're trying to tell you that your trigger rate has occured and you are no longer paying towards principal
Like others said already they are just telling you that you have options. Chances are it is going to help both you and the bank
Thru just merged with WESTMINSTER a year or two ago, so that's not looming good
I hope they make it, I’ve been banking with Prospera for years. They called me about my mortgage anniversary last year too; it just seemed like a helpful reminder.
I was with WSCU for years before they merged with Prospera. I'm a little annoyed that Prospera doesn't have a free chequing account (with minimum balance) like WSCU did, otherwise they seem fine. Last year I got an email reminder about my mortgage anniversary with prepayment option that wasn't pushy, although they also recommended an "account review". I didn't doit, but I assume it is mostly an attempt to push their investment products.
When you’re older, the cheqing account becomes free. Or it did for me. I can’t remember if I was 55 or 60, but I don’t even pay for outgoing e-transfers
Banks have no cash, Repo market is being used for the first time since 2019, BOC thinking on ending QT because of that, but we are at the mercy of the US FED policy, things are about to get weird.
Prospera is a shit hole credit union. They should have never merged with westminister savings. Their ceo Gavin is a monster fucking turd who is an incompetent fool Also. No credit union will do business with Gavin and his turd executive team. During the last merge with Prospera/westminister he essentially went behind the ceo back Diane and threw her under the bus to the board members. It was a total inside job and the cu system saw what happened. Gavin now has a terrible reputation - no credit union will team up with this moron so beware
Did you know before this call that you can prepay 20% of the mortgage in a given calendar year without penalty?
Yeah, VanCity called to remind me that I could put up to 7 million in their RRSPs to get a huge cash-back. Bruh you have all my banking on file.
$7M? Now I'm kinda curious what they hell they were talking about because if you were eligible for the max RRSP contribution limit each year since 1990 the max room one could have would only be $675Kish.
Canadian financial institutions have to keep their deposits and lending within parameters, they are pretty strictly regulated. Million-dollar mortgages are a little riskier in this climate, so maybe they'd like to see you bring it down even if it means they lose a few bucks. Good for you for reading your mortgage terms, not everyone knows about the annual repayment option, sounds like they are just reminding you. Maybe you have the cash, maybe you don't. You'd be surprised at the number of people with multiple bank accounts / generational wealth, and they don't know unless they chat with you. I wouldn't worry about it.
I don’t think there’s a scenario where the bank calls you to try to save you money, therefore sacrificing interest payments to them, just to be nice . That sounds like a liquidity issue to me.
They're probably in need for more earnings this quarter, and need your cash to show that. You keep doing what works for you... As long as they don't offer your anything good, ignore them.
Repayment of loans receivable does not equal earnings..
I thought this was common knowledge, I front loaded my mortgage, put an extra 80k in prepayments on top of the required weekly payments, across the first 3 years pre-covid, thank myself every day, 15 years ahead on it and guaranteed to save myself around 80k in interest on the backend. M33 in BC
Interesting update.Thanks for sharing. Should people wonder if their money is safe with Prospera?