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The 10 most common mortgage myths (1 /10)

For my first few posts, I decided to tackle the most common falsities I hear about the mortgage market. Each deserves its own post.

Myth #1 : « Always choose the variable rate! » or its older cousin « Always choose the 1 year rate! ». Because the mortgage rates have been on a...

Myth #2: The bank will charge me a penalty equal to three months of interest if I break my mortgage contract before the end of my term.

The statement is true if you have a floating rate, but not necessarily with a fixed rate. With the latter, the bank will compute two penalties. The first one will be three months of interest. The other is a bit more obscure. We call it "Interest Rate Differential" (IRD). Guess the one you will...