Mortgage Renewal - "trusting" customers pay 41.6% too much!
Thu, Mar 12, 2009 at 7:17 PM
To: Alert@ctv.ca
Cc: editors@thestar.ca
Dear Pat and Editors,
My daughter's mortgage was coming up for it's first renewal.
She called me Mon March 9th asking what to do ... Apr 1/09 is the renewal date ... she'd heard nothing from the existing company (TD Canada Trust).
I told her she'd likely get a written notice in the mail any day, but advised her to phone the local branch and see what they said on the 'normal' advance timing of renewal notices from mortgage headquarters ... maybe hers had been lost in the mail?
I glanced at the weekly flyer I had from our office's TD Mortgage specialist (dated March 6th) and told her that the 5yr mortgage was "posted" at 5.79%, but that the actual, normal, lowest, discounted rate quoted was 4.39% for the same term.
After some discussion on why the banks (all of them) have these two rates, she hung up to call the branch and I walked over to chat with our office TD Specialist, he said he didn't do renewals but would call his branch associates and confirm the best available rates offered.
My daughter called almost immediately saying she'd dropped by her supermailbox ... and ... there was the renewal letter - quoting a 5 yr rate of 5.79% and describing the steps to agree and submit the accepted form
I told her to wait til Wednesday to see what unfolded and then call the branch.
On Tuesday the branch called her! Asked her if she'd got the letter? was she willing to renew? Why yes she said, but at the "lowest rate" cited on the March 6th flyer I'd send her .... 4.39%
After some stammering and stuttering by the branch rep., agreement on the availability of 4.39% was conceded and a meeting for Fri 13th was arranged.
By email on Wed 11th our office TD specialist informed me rates had dropped since the creation of the March 6th flyer ... that any branch could renew the mortgage ... and the best rate going from TD was 3.79% on 4yrs or 4.09% on the 5yr basis.
I called my daughter to inform her of the "news" that I too had been out-of-date on and she called the branch to check on the "new" rate's availability PLUS to check on another, as-yet-undiscussed, aspect of the renewal process - the fact that SOME borrowers had had the $175 "renewal fee" waived .... if they asked for it to be waived.
After a pause, a few minutes on hold, some humming and hawing, a few more minutes on hold ... the appointment for Friday was confirmed with a promise of the 4.09% rate AND the understanding that the $175 would be unnecessary.
What if she hadn't phoned somebody to check? What if she and her husband had trusted that their existing company was giving them the 'best available rate' and had just signed and returned the form?
They'd be paying 1.70% too much! .... 41.6% too much!!
And they'd never have known ... since any visit to the branch would show the "posted" rates on display.
This is not about just this one bank .... they're all doing it ... thousands of times a month, a week, a day ... sending out renewal letters at rates far higher than what is readily available ... for customers who ask.
This Posted Rate/Discount Rate game gets foiled with resale sales because the Realtor involved with the transaction explains the game to the buyers, but how many New Home buyers (like my daughter and her hubby) just blindly sign the renewal the first time it comes around and end up overpaying thousands of dollars (1.7% on ~200,000 x 5yr =$17,000) in interest
Just because they thought they were dealing with an honest, reputable, lending institution.
Yours truly,
To: Alert@ctv.ca
Cc: editors@thestar.ca
Dear Pat and Editors,
My daughter's mortgage was coming up for it's first renewal.
She called me Mon March 9th asking what to do ... Apr 1/09 is the renewal date ... she'd heard nothing from the existing company (TD Canada Trust).
I told her she'd likely get a written notice in the mail any day, but advised her to phone the local branch and see what they said on the 'normal' advance timing of renewal notices from mortgage headquarters ... maybe hers had been lost in the mail?
I glanced at the weekly flyer I had from our office's TD Mortgage specialist (dated March 6th) and told her that the 5yr mortgage was "posted" at 5.79%, but that the actual, normal, lowest, discounted rate quoted was 4.39% for the same term.
After some discussion on why the banks (all of them) have these two rates, she hung up to call the branch and I walked over to chat with our office TD Specialist, he said he didn't do renewals but would call his branch associates and confirm the best available rates offered.
My daughter called almost immediately saying she'd dropped by her supermailbox ... and ... there was the renewal letter - quoting a 5 yr rate of 5.79% and describing the steps to agree and submit the accepted form
I told her to wait til Wednesday to see what unfolded and then call the branch.
On Tuesday the branch called her! Asked her if she'd got the letter? was she willing to renew? Why yes she said, but at the "lowest rate" cited on the March 6th flyer I'd send her .... 4.39%
After some stammering and stuttering by the branch rep., agreement on the availability of 4.39% was conceded and a meeting for Fri 13th was arranged.
By email on Wed 11th our office TD specialist informed me rates had dropped since the creation of the March 6th flyer ... that any branch could renew the mortgage ... and the best rate going from TD was 3.79% on 4yrs or 4.09% on the 5yr basis.
I called my daughter to inform her of the "news" that I too had been out-of-date on and she called the branch to check on the "new" rate's availability PLUS to check on another, as-yet-undiscussed, aspect of the renewal process - the fact that SOME borrowers had had the $175 "renewal fee" waived .... if they asked for it to be waived.
After a pause, a few minutes on hold, some humming and hawing, a few more minutes on hold ... the appointment for Friday was confirmed with a promise of the 4.09% rate AND the understanding that the $175 would be unnecessary.
What if she hadn't phoned somebody to check? What if she and her husband had trusted that their existing company was giving them the 'best available rate' and had just signed and returned the form?
They'd be paying 1.70% too much! .... 41.6% too much!!
And they'd never have known ... since any visit to the branch would show the "posted" rates on display.
This is not about just this one bank .... they're all doing it ... thousands of times a month, a week, a day ... sending out renewal letters at rates far higher than what is readily available ... for customers who ask.
This Posted Rate/Discount Rate game gets foiled with resale sales because the Realtor involved with the transaction explains the game to the buyers, but how many New Home buyers (like my daughter and her hubby) just blindly sign the renewal the first time it comes around and end up overpaying thousands of dollars (1.7% on ~200,000 x 5yr =$17,000) in interest
Just because they thought they were dealing with an honest, reputable, lending institution.
Yours truly,
posted by Walk a Kb or Two in my cassins | 7:37 pm
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