(778) 668-9320 scott.dawson@verico.ca

While many people are initially attracted to a mortgage rate that’s 10 bps or more below other rates advertised in the market, many clients don’t realize that those low rates typically signal a quick close and/or no-frills product that may come with significant limitations on what the borrower can do within the contracts terms.

What is a no-frills mortgage?

Typically, no-frills products are designed to appeal to purchasers who are highly cost-sensitive, such as those who might not qualify at higher rates, first-time buyers with limited opportunities to make prepayments or those not needing to re-finance during their term.

What is the RMG Low Rate Basic mortgage?

RMG Mortgages has just begun offering what their own No-Frills mortgage referred to as the “Low Rate Basic Mortgage”. This is a niche product that offer homeowners the opportunity to sacrifice 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
  • Portable
  • 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.

    What’s today’s RMG Low Rate Basic Rate?

    Simply fill in the form below and we’ll contact you with today’s RMG Low Rate Basic Rate.
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