What is the interest usually when term is over?

[Neil1]

Say you have a 3 years term mortgage 3% fixed interest (20 years amortization).

What are your payments to the bank usually, in the months after the 3 years term, before deciding to which bank to move the mortgage? In other words, what is the default if you dont update the bank/you say nothing for few months after the term?

I understand it is supposed to be mentioned in the agreement. just could not find it in the terms summary my friend received from RBC. (Guess the standard terms are similar among the top banks)

Thanks,

Neil

 

[Thomas Beyer]

Technically, your mortgage is due and you are in default if you do not pay the full mortgage back. In practice all banks refer back to their most expensive short term rate, usually s.th. like P+2% or 5%. Most banks send you a letter 3-6 months prior to maturity outlining the renewal options, incl. the option they will pick for you if you do nothing.

 

[Neil1]

[quote user=ThomasBeyer]Technically, your mortgage is due and you are in default if you do not pay the full mortgage back. In practice all banks refer back to their most expensive short term rate, usually s.th. like P+2% or 5%. Most banks send you a letter 3-6 months prior to maturity outlining the renewal options, incl. the option they will pick for you if you do nothing.





Thanks,

Neil