It's not always about the rate people!

As a mortgage broker, one of the most difficult tasks can be to convince a headstrong client that, when it comes to finding the best mortgage, they have to consider more than rate. A recent report by ING Direct confirms this fact - with 71% of respondents confirming that rate is, indeed, the most important factor to them when choosing a mortgage provider. Only 10% said terms are important to them, while a shockingly lower 6% cited prepayment terms as an important factor.

In an effort to convince you that the entire mortgage picture is important, you may want to consider the following:
1) Looming interest rate increases
With many expecting rates to increase over the next few months and years, chances are high that when it comes time for you to renew your mortgage in 5 years time, your monthly payments will be higher (or the same) despite the fact that your mortgage balance will be lower. The more you prepay while rates are low, the more principle you'll tackle - and the easier the monthly payments will be when it comes time to renew or sell in favour of a larger home.

2) Save on income taxes
While it's true that the majority of mortgage holders don't take advantage of available prepayment privileges, it's definitely something to consider for anyone who makes an annual bonus (or commission). Because this extra income usually falls victim to high income taxes, it might be wise to sock them away in an RRSP, and then use the resulting tax refund to put towards a mortgage.

3) Increased flexibility.
Portability, refinance costs and early payout options may not mean much when you are buying that brand new home, but they mean a lot when that brand new home loses its charm - or if life takes a sharp turn and forces you to pick up and move. Paying a bit more now for these added options may be worth a lot of extra savings down the road - especially if you're at a less-stable point in your life.