I saw an ad on my Facebook newsfeed about one of Canada’s retail banks offering a 1.99% mortgage rate. Sounds great, right? Well, let’s read the fine print, check the math and find out.
You get 1.99%… for the first 9 months only. Then it gets boosted up to 2.83% for the next 39 months for a total of 4 years.
Today I have a 4 year fixed rate of 2.59% for the entire 4 years.
Based on a mortgage of $300,000.00 here is the interest costs for each over the 4 year term…
Teaser 1.99% / 2.83% = $29,945.45
Broker discount 2.59% = $28,447.56
Savings = $1,497.89
If it sounds too good to be true folks….