A low-interest rate is absolutely important, but even more important is to make sure you’re paying the least amount of money to your bank/lender over your term. Interest rates definitely factor into this but having a flexible mortgage with the right features will protect you and your valuable equity.

Some lower rate mortgages look good on the outside but can be restrictive and come with large penalties.

A low rate mortgage with poor features, coupled with bad advice, will cost you dearly. You need to go into the mortgage process with eyes wide open.

There is an interesting stat in Canada - 60% of homeowners break their mortgage around the 36-month mark. Lenders are counting on this; paying a high penalty is factored into their projections and their bottom line.

Question: How do you pay the least amount of money to your lender over your term?

Answer: Combination of a low-interest rate, flexibility, low potential penalties, and great advice.

Here are a couple of things to watch out for:

Prepayment Privileges: This is the ability to increase your mortgage payment and make a lump sum against your mortgage. Any increased mortgage payment and/or lump sum would go directly against your principal and reduce your amortization (length of your mortgage).

Mortgage Penalty: Not all penalty calculations are created equal. There is a big difference between fixed vs. variable rate mortgage penalties. There is even a difference between lenders and how they calculate your penalty.

Portability: This is the ability to move your current mortgage and interest rate to another property. This could save you thousands of dollars in potential penalties and allow you to keep your interest rate if it’s attractive.

Customer Service: Some lenders are better than others when it comes to customer service. This will mean different things to different people but it’s important to know if you’ll be taken care of after your closing date.

By knowing the small print in the mortgage details, you’re ensuring the largest investment of your life will be protected.

You need to go into the mortgage process with eyes wide open while not getting too caught up in what is the lowest rate...your bank account will thank you later.