Quote:
Originally Posted by GGG
It isn't deliberately incomprehensible. Banks own websites have calculators for you to figure it out.
It's important to the bank because banks make money on fixed rate mortgages buy borrowing money on the market and lower rates than you can access. So if they borrow on a 5 year rate to cover your 5 year mortgage they lose money if you don't meet your terms.
The end result of getting rid of IRD is higher fixed rate or higher fixed penalties. There is a reason that open mortgages are more expensive everywhere than closed mortgages. It's because they are more costly to operate.
Again if you don't understand IRD you should not sign a mortgage document without legal review.
This isn't a monopoly situation where you are forced to buy a closed fixed rate product from one bank. You have a choice of lenders and a choice of products.
It's Grade 9 Math FFS
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Lol. You really think this is about people not understanding penalties?
It’s because all the calculators you speak of say your penalty will be a certain number but the banks use a posted rate, a number which has absolutely no bearing on the interest rate and isn’t even a real rate offered to clients, to falsely inflate the penalty by calling the real rate a “discount”. Except it’s not a discount. It’s the rate everyone gets. The posted rate is bull####. It exists to screw over consumers when calculating penalties.
The idea that you think this is about your grade 9 math skills is hilarious. You’ve completely missed the point and for some reason are insisting on being a dink about it insulting people.