Real Estate

Collateral Mortgage...How much to Charge?

  • Last Updated:
  • Jun 19th, 2018 9:51 am
Sr. Member
Jan 4, 2004
524 posts
107 upvotes
Surrey

Collateral Mortgage...How much to Charge?

Hi Guys,

I've been reading quite a bit...and like most others in Canada, I had no idea the difference prior to my latest mortgage.

Anyways, I am going with TD...and part of my application is stating how much I collateral I want to charge.

I can charge up to 125% as we all know...but other than purely refinancing (Which I would never do; If i really needed more money, I can pull in some from elsewhere), is there any benefit to charge so much?

If I only charge the principle mortgage amount, if i understand it I still have the remainder in equity in which i could possibly go to another lender to get a HELOC or something correct?

I just feel the pros of charging the max amount don't really outweigh the cons...probably just equal...am i wrong?
1 reply
Deal Guru
User avatar
Feb 2, 2014
11233 posts
3351 upvotes
Toronto
Just a heads up, if you take a collateral mortgage, you will have to legal fees and possibly a higher rate if you ever decide to change lenders in the future.

If you're going to get a HELOC and use the HELOC, then sure, take it. If not, avoid collateral charges.

Also, if you're going variable with TD, be aware their Mortgage Prime Rate is .15% than every other lender out there.
Kevin Somnauth, CFA
Principal Broker/Owner - First Toronto Mortgage - MA (Ontario #13176, BC #X301007)
Real Estate Salesperson - Century 21 Innovative

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