Only 33% of Canadian homeowners with a mortgage have taken the time read their entire mortgage agreement. Of those who have read at least some of their agreement, only 27% say they understood all of the details.
The survey, conducted by Scotiabank, also revealed that 84% of Canadian homeowners and prospective owners think that competitive interest rates are the most important factor when selecting a mortgage. The next most important factors were flexibility to repay the mortgage at any time without penalty (63%) and prepayment privileges without penalty (60%).
Scotiabank's Managing Director of Real Estate Secured Lending David Stafford suggests that, when reviewing mortgage options, consumers should keep an eye out for features such as prepayment privileges, bi-weekly payments, and the ability to port the mortgage to another property.
"Just as important as rate are mortgage features and flexibility," he says. "Many homebuyers focus on the rate and payment schedule, but it's crucial they also consider other important options, such as prepayment schedules. Are you going to be able to make an extra payment or two during the year? With certain products, that's not allowed – and prepayment can shave years off your mortgage."