the partial prepayment rate (or curtailment rate) on scotiabank mortgages is much lower than that of the other canadian banks. people prepay a lot more for TD and RBC mortgages. does anyone know why this difference is? is it something to do with the mortgage provisions. i know that RBC mortgages have a double-up payment option, whereas Scotiabank doesn’t i dont think. Could this explain a lot of the difference? Thanks.
Scotiabank, has a double-up option too. I would say all of the big banks in Canada have the same mortgage options for prepayments. You could look into the number of mortgages Scotia is getting transfered from other banks, maybe they are more eager to pay prepayment penalties to get more mortgage business and grow the market share compared to other banks. Or maybe they are just better at having people transfer mortgages to them and keep exisitng customers from transfering mortgages out.
thanks are you sure about this though. ive been looking through the canadian banks websites, and i only seem to find a double up option for RBC and TD mortgages.
Yes I’m sure, I have a Scotiabank mortgage and there is a double up option in it.
thx
just one more follow up question. if a mortgagor exercises his double up option, does this mean just that one time he gets to pay up to double of his scheduled principal payment and then after that the following payments are back to the normal lower scheduled payments. or is it if he chooses to double up, then every payment after that will be the doubled payment. because some banks only offer double up payment once a year, so im assuming that means if they choose to they can only double up that one payment and the rest of the following payments stay the same. thx.
My Scotia mortgage allows me to double up as many times per year as I want. You have to notify them each time you want to double-up though (i.e., if I advise them to double-up, it only applies to the next payment).
same at rbc…you can double up as often as you like. (every payment or just one payment or anywhere in between…which you can start/restart whenever you want). Plus 10% lump sum of original balance once/year. Like others have said, i think this is par for the course across the (canadian) industry.