It’s nice to get to the office on Monday mornings and see a mortgage rate drop email sitting in your inbox. It was especially nice to see the RMG Low Rate Basic 5 Year Fixed rate drop to 3.30%!5 Year Fixed Rate is 3.30%
What is the RMG Low Rate Basic mortgage?
RMG Mortgages has been offering what they call a “Low Rate Basic Mortgage” for some time now. This is a niche product that offer homeowners the opportunity to sacrifice some mortgage product features a lower rate. The RMG Low Rate Basic mortgage would suit a home buyer that wants a low 5 year fixed rate mortgage if they expect to be staying in the same home for the entire term and not needing to refinance which makes it suitable for first time buyers with less than a 20% down payment.
What are the features?
- Optional 20% annual pre-payments
- Optional 20% increase of regular payments
- Up to 30 year amortization available
What are the limitations?
As with all No-Frills mortgage products there is always a catch. You trade off certain flexibilities for a lower rate.
The RMG low rate basic mortgage does have the following limitations:
- Not Assumable
- No Increase & Blend – This means if you were porting and needed to add additional funds to your mortgage you would have to pay a penalty.
- No pre-approvals – Live deals only with a 90 day rate hold period
How is the penalty calculated?
It’s also worth noting that the penalty to break the RMG low rate mortgage is also the greater of the interest rate differential (IRD) or 3% of the outstanding balance. When choosing this type of mortgage make sure you fully understand the terms and conditions of the mortgage. While you may be saving a few hundred dollars over the course of your 5 year term if you were to break this mortgage early the penalty can be substantially higher than another lenders offering.
Questions about the RMG Low Rate Basic Mortgage?
Simply fill in the form below and we’ll be in touch.
[contact-form subject=’Low Rate Basic’][contact-field label=’Name’ type=’name’ required=’1’/][contact-field label=’Email’ type=’email’ required=’1’/][contact-field label=’Phone Number’ type=’text’/][/contact-form]