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….

Buying a house with “rent to own” contract can be a good way to live in the home you are saving down payment for. However, what if the owner of the home defaults on their mortgage and ends up in foreclosure? You could lose the down payment you built up and have to move when the bank sells the property. Renter beware!