Why the Fine Print Matters More Than the Rates

The recent unveiling of a sub-one per cent interest rate on a mortgage got a lot of media attention.

When have rates ever been this low?

It’s no surprise people have been keen to jump on this offer but as tempting as it may seem, the devil is in the details.

Advertising such a low rate is a brilliant marketing move to get people in the doors of a bank — or at least on the phone during a pandemic. But if you don’t read the fine print before signing on, you may discover your low-interest mortgage wasn’t such a good deal after all.

What to look for in an ultra-low interest mortgage

Ask lots of questions and study the terms carefully with such mortgages. How long are you locked into this borrowing plan? What happens if your life changes drastically and you need to break your mortgage? What’s the penalty if that happens?

And they’re generally written in the fine print of every deal. Those details need to be reviewed so you know what happens in case of career changes, which this year has taught us can happen suddenly, divorce or death. All of these circumstances can cause a major shift in income and force you to break your mortgage.

Help where you need it

Buying a home is exciting, and sometimes the thrill of calling a place one’s own can override the heavier conversations that need to happen before signing on any dotted line, no matter how low the interest rate.

There are lots of ways people can structure their debt to meet their goals. You should focus on the rate of change not just the rate that’s given to fit the circumstances of today.”