TORONTO, Jan. 24 /CNW/ - Is a flexible mortgage important to you?
According to the TD Canada Trust 2011 Homebuyers' Report, a vast
majority of Canadians say yes. Eighty-nine percent said being able to
make additional lump sum payments or weekly or bi-weekly payments was
important to them. TD Canada Trust customers have long had these
options for paying down their mortgage faster, and more than half of
them already take advantage of them.
The survey also revealed that 3 out of 4 Canadians would like the
ability to defer or reduce their monthly mortgage payment in the case
of an unexpected event or shortfall. As well, 60% would be more likely to make a lump sum payment to pay off their mortgage faster if that
gave them the flexibility to pay less at a later date if something
unexpected came up.
Today TD Canada Trust is introducing additional flexible payment
features that will give customers more choice and control over their
lives when they really need it.
Pay down your mortgage ahead of schedule and have the flexibility to reduce your payments later, for up to four
New and renewing customers who pay down their mortgage ahead of schedule
may qualify to later take advantage of a temporary reduction in their
regular mortgage payment amount, an option that may be helpful in the
event of short-term income reduction.
Pay down your mortgage ahead of schedule and have the flexibility for a payment break later, for up to four
By paying ahead, not only do you get the benefit of paying off your
mortgage faster, you also have more flexibility and control and may
qualify to take a temporary break later when you really need it. This
added flexibility can make things easier in many situations such as a
maternity leave, caring for a loved one or temporary job loss.
Pay down your mortgage on schedule and have the flexibility to defer or reduce a payment later
A major event can throw anyone off track. If you've been paying your
mortgage on schedule and are unexpectedly facing a major expense or an
unanticipated reduction of income, at TD Canada Trust you may be able
to defer or reduce one monthly mortgage payment a year up to four times
during the life of their mortgage.
Interest continues to accrue during each of these events and is added to
the outstanding balance at the time of each regular payment date.
Being financially prepared
"Many customers want to pay down their mortgage ahead of schedule and be
debt-free sooner, but they worry about not having the funds available
if they need them in the future," said Farhaneh Haque, Regional Sales
Manager, TD Canada Trust. "Our new flexible mortgage payment features
were designed with that in mind and can help customers manage their
debt responsibly and provide further flexibility if financial
difficulties or unforeseen life events come up in the future."
"Customers who qualify have more flexibility when paying their mortgage
ahead of schedule," said Haque. "It's really the best of both worlds
and makes it more comfortable to pay off your mortgage faster knowing
that if circumstances change in the future you may have the flexibility
to modify your payments for up to four months. If you've paid ahead and
you find yourself challenged by a major change down the road, knowing
you may not have to worry about paying your mortgage for a while can
bring real comfort when you need it most."
How the flexible mortgage payment features work
Sandy renews the mortgage on her home, in the amount of $212,000, with a
4-year term at 4.94% interest. Her monthly principal plus interest
payment is now $1,225. Sandy is up to date on her mortgage payments and
decides to use her annual work bonus to make an additional lump sum
payment of $4,000 in June 2011, in order to take advantage of the
flexible mortgage payment features for her maternity leave. In July
2012, she takes a four-month maternity leave and qualifies to reduce
the monthly principal and interest portion of her payment to as low as
$225 for that period.
Li purchases a condo and obtains a mortgage for $175,000, with a 5-year
term at 5.19% interest. His bi-weekly principal plus interest payment
is $518. In June, July and August 2011, he decides to use extra money
he's received on sales commissions to double up on his mortgage
payments, resulting in a prepaid amount of $3,408, in order to take
advantage of flexible mortgage payment features in the future. In 2012,
he travels abroad for the summer to work in international development
and qualifies to take a three-month payment vacation on his mortgage.
Karl obtains a mortgage on his townhouse, in the amount of $212,000 with
a 5-year term at 5.19% interest. His monthly principal plus interest
payment is $1,258. Karl makes his payments on time but does not take
advantage of any of his options to pay down his mortgage ahead of
schedule. In July 2012, his partner is injured and is hospitalized for
two weeks. Due to resulting expenses and a brief loss of income, Karl
requests the ability to skip a mortgage payment. The skipped mortgage
payment ($1,258) does result in the mortgage amortization period
extending beyond the original period. However, when he renews, the
amortization period is adjusted back to the original period so that
Karl's payment schedule is back on track.
In all cases, interest continues to accrue and is capitalized at the
time of each regular mortgage payment date.
Qualifying for flexible mortgage payment features
Customers must meet the following conditions and obtain TD approval:
Customers' mortgage and other credit must be in good standing at all
times, for all features
Mortgage balance must not exceed the lesser of 90% loan-to-value (LTV),
or the original principal amount borrowed, for all features at the time
Customers must have made additional payments by either lump sum or
increased frequency to be eligible for a prepaid reduction or vacation
Must be new mortgage customers or current customers who renew their
mortgage on or after January 24th
Note that customers are required to continue to pay their realty taxes
and creditor insurance payments, if applicable.
Highlights of Canadians attitudes towards flexible mortgage payment
55% of Canadians surveyed indicated that they paid their mortgage
weekly, every two weeks or twice a month - and 79% of them said they
did so in order to pay their mortgage off as soon as possible
83% would like the ability to reduce the amount of their monthly
payments during an unexpected life or work event
75% would like the ability to skip a payment during an unexpected
65% would like the ability to postpone making payments during a planned
care leave or extended holiday
For more information on the features, please visit: www.tdcanadatrust.com/flexible
About the TD Canada Trust 2011 Homebuyers' Report
The TD Canada Trust 2011 Homebuyers' Report was conducted by Environics
Research from December 22 to 29, 2010, through a custom, online survey.
1,001 Canadians were polled.
About TD Canada Trust
TD Canada Trust offers personal and business banking to more than 11.5
million customers. We provide a wide range of products and services
from chequing and savings accounts, to credit cards, mortgages and
business banking, to credit protection and travel medical insurance, as
well as advice on managing everyday finances. TD Canada Trust makes
banking comfortable with award-winning service and convenience through
24/7 mobile, internet, telephone and ATM banking, as well as in over
1,100 branches - most open 8 'til late and many now open Sunday. For
more information, please visit: www.tdcanadatrust.com. TD Canada Trust is the Canadian retail bank of TD Bank Group, the
sixth largest bank in North America.
SOURCE TD Bank Group
For further information:
TD Bank Group
Paradigm Public Relations
416-203-2223 x. 221