A client asked us today if we knew of any lenders who allow “free switches” into a hybrid mortgage. (A hybrid is a mortgage that’s part fixed and part variable, or part short-term and part long-term.)
We composed the list below and thought it might be useful to others. It shows the primary lenders with hybrid mortgages and indicates which of them offer free switches.
- National Bank (has “free switches” into hybrids)
- ATB Financial (has “free switches” into hybrids)
- RBC (has “free switches” into hybrids)
- Scotiabank (refinances only – legal fees apply)
- Laurentian Bank (refinances only – legal fees apply)
- Merix Financial (refinances only – legal fees apply)
- Canadiana Financial (refinances only – legal fees apply)
- HSBC (refinances only – legal fees apply)
If anyone knows of other major lenders offering free switches into a hybrid mortgage, send us a comment below and we’ll add them to the list.
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Side Notes:
- “Free switch” means the new lender will generally cover legal and appraisal costs. That’s opposed to a refinance, where legal fees (and often appraisal fees) apply. The lender losing the mortgage will typically charge the borrower a discharge fee in either case.
- Free switches usually apply only to straight transfers (where there’s no increase to mortgage amount or amortization).
- If your current mortgage has a line of credit attached, you must refinance when changing lenders. Free switches do not apply.
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Last modified: April 26, 2014
Coast Capital Savings in B.C. will pay refinance cost to transfer into a Hybrid mortgage, some restrictions apply.
Great list.
Thanks
Some hybids are collateral charges so what happens in these cases. For example, clients in Scotia hybrids cannot easily switch to another lender without incurring legals. Are you saying that these lenders above will switch them for free?
Also which lenders have hybrides that are NOT collateral charges?
Thanks for the List. Very informative. :)
Robin, As you know you can’t switch a collateral charge mortgage. That is why you have to pay legal fees when you move into a mortgage like the Scotia STEP. By comparison, National Bank’s “Made to Measure” mortgage is not a collateral charge so people are able to switch into it at no cost.
Not only do people pay legals to move into the STEP and other collateral mortgages, but they pay legals to move OUT of them too!
Thanks very much for your answers. Rob – it would be good to get a comparison of lenders who put collateral charges on their products.
Useful information. Thanks for posting.
The ones without free switches are generally collateral charges.