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  • Oct 23rd, 2020 3:33 pm
Newbie
Oct 12, 2020
9 posts
1 upvote

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Thanks for the help everyone. Mods please delete this post.
Last edited by SteveShin on Oct 27th, 2020 12:56 pm, edited 6 times in total.
5 replies
Deal Guru
User avatar
Mar 23, 2008
13006 posts
10009 upvotes
Edmonton
SteveShin wrote: Hello,

My friend is in a weird situation so im posting here for advice. His mortgage is up for renewal in a couple weeks and he wants to switch lenders. He asked his current lender RFA to put him an open mortgage to complete the switch process. RFA stated that they do not offer an open mortgage term and he would have to pay various penalties to break the closed. Does this sound right? I thought all lenders would have to allow an open mortgage term. Any help is appreciated.
Not sure what you want from people in here. If the lender says they don't offer an open mortgage, it doesn't really matter if someone here tells you that doesn't "sound right". And why should a lender "have to" offer any particular solution?

My advice... Get your friend to try to escalate it within RFA to see if there's any other options, or get him to talk to a mortgage broker about getting a switch done earlier.

C
Newbie
Oct 12, 2020
9 posts
1 upvote
CNeufeld wrote: Not sure what you want from people in here. If the lender says they don't offer an open mortgage, it doesn't really matter if someone here tells you that doesn't "sound right". And why should a lender "have to" offer any particular solution?

My advice... Get your friend to try to escalate it within RFA to see if there's any other options, or get him to talk to a mortgage broker about getting a switch done earlier.

C
Good points. Thanks for the advice.
Deal Addict
User avatar
Jan 2, 2012
4596 posts
3099 upvotes
Toronto
SteveShin wrote: Hello,

My friend is in a weird situation so im posting here for advice. His mortgage is up for renewal in a couple weeks and he wants to switch lenders. He asked his current lender RFA to put him an open mortgage to complete the switch process. RFA stated that they do not offer an open mortgage term and he would have to pay various penalties to break the closed. Does this sound right? I thought all lenders would have to allow an open mortgage term. Any help is appreciated.
In hindsight he should have started the process to get approval with the new lender several weeks ago, and not waited so last minute.

Although 2 weeks is not out of the question. You can ask the new lender if they can put a rush on the mortgage application, and perhaps they can finish in time before the current mortgage term ends.
Deal Addict
Jan 1, 2017
1826 posts
1876 upvotes
Tell you friend to check his contract. Most contracts state that if his mortgage comes to maturity before he has switched out he would be automatically put on an open mortgage. He doesn’t need to tell them to switch him to open term, it will happen automatically.

If he hasn’t signed anything with the current provider to renew they can’t automatically put him in X years closed term mortgage.
Deal Guru
User avatar
Feb 2, 2014
11233 posts
3350 upvotes
Toronto
SteveShin wrote: Hello,

My friend is in a weird situation so im posting here for advice. His mortgage is up for renewal in a couple weeks and he wants to switch lenders. He asked his current lender RFA to put him an open mortgage to complete the switch process. RFA stated that they do not offer an open mortgage term and he would have to pay various penalties to break the closed. Does this sound right? I thought all lenders would have to allow an open mortgage term. Any help is appreciated.
Unfortunately yes, some lenders do not do OPEN mortgages.

As you said, he should have started this process much, much sooner. Now he will have to rush to meet the renewal date or renew with RFA.

If he can get to the legal stage before the renewal date, that can buy him some time. But he will need to get his file lender complete asap.
Kevin Somnauth, CFA
Principal Broker/Owner - First Toronto Mortgage - MA (Ontario #13176, BC #X301007)
Real Estate Salesperson - Century 21 Innovative

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