- Question #1: With the changes to the Bank of Canada interest rates and consequently CTBC Bank’s Prime Rate, how does it affect my Variable Rate Mortgage?
- Response: For the majority of our CTBC Bank mortgage accounts where the monthly payment was calculated with the Straight-Line Amortization Method (ie: equal principal payment plus accrued interest), the monthly payment is automatically adjusted but since the payment has likely increased you will need to make sure you have sufficient funds to cover the upcoming payment. For accounts that were calculated with the Blended/Traditional Amortization Method (ie: Fixed Payment), your payment will not change unless the updates to prime rate causes the variable rate on your mortgage to reach the Trigger Rate or the existing payment is not enough to cover the accrued interest. It should be noted in the case your interest rate increases but the regular payment remains, a greater portion of your monthly payment goes toward interest and less towards the mortgage principal. As a result, this can possibly extend your original amortization period and thus your mortgage will be paid at a later date then originally scheduled. However, upon maturity, should you decide to renew your mortgage with CTBC Bank, the payments will be adjusted and the original amortization schedule will be restored.
- Question #2: How do I know if my mortgage is based on either the Straight-Line or Blended Method?
- Response: In simple terms, with the Straight-Line method, since the payment is based on an equal Principal plus accrued interest per month, every payment made will vary month to month. On the other hand, for the Blended method, your regular payment is the same amount every month. If you are still unsure of your payment arrangement, please feel free to contact one of our local CTBC Bank branches who will gladly assist you.
- Question #3: The Variable rate on my Mortgage has reached the trigger point or my regular payment is not enough to cover the accrued interest, what’s next?
- Response: Should either one of these scenarios arise or it is closely approaching, an adjustment will be made to your monthly payment to rectify the issue and a member our CTBC Bank family will be in contact to notify you of the situation and provide further details. Contact will be made either via Phone, e-mail or mail. Formal confirmation of the modified payment will be sent in the mail.
- Question #4: Given the possible changes to my account, what will happen to my mortgage at maturity?
- Response: As a valuable customer to our CTBC Bank family, at maturity, should you decide to pursue a renewal with us and your account continues to meet our current requirements & you have not received any notification otherwise (ie: Non-Renewal), we will gladly consider providing you with our current renewal options & your payments will be re-adjusted with the rate offered at that time and to restore the original amortization schedule. Please note, the re-adjustment of your payments may lead to a significant increase so it is important to keep that in mind when making your informed decisions.
- Question #5: I have concerns about my adjusted payments, are there other options for me?
- Response: Given the fluid nature of variable rate mortgages, the Bank understands the uncertainty can be stressful. If you have any questions or concerns about your current mortgage arrangement, please feel free to contact one of our local CTBC Bank branches who will gladly assist you.
- Question #6: I still have other questions regarding Variable Rate Mortgages, where can I find additional information?
- Response: The Financial Consumer Agency of Canada (FCAC) website is your best resource to gather further information to make an informed decision. The links are provided below
*DISCLAIMER: Although we make every effort to ensure its accuracy, the information contained in this FAQ is presented in summary fashion, for your convenience only. Your actual legal rights and obligations are set out in the documentation provided to you at the time funds were advanced under your mortgage. In the case of any ambiguity or conflict between those documents and the information in this FAQ, your mortgage documents will govern.
