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TORONTO, Jan. 24 /CNW/ - Is a flexible mortgage important to you? According to the TD Canada Trust 2011 Homebuyers' Report, a vast majority of Canadians say yes. Eighty-nine percent said being able to make additional lump sum payments or weekly or bi-weekly payments was important to them. TD Canada Trust customers have long had these options for paying down their mortgage faster, and more than half of them already take advantage of them.

The survey also revealed that 3 out of 4 Canadians would like the ability to defer or reduce their monthly mortgage payment in the case of an unexpected event or shortfall. As well, 60% would be more likely to make a lump sum payment to pay off their mortgage faster if that gave them the flexibility to pay less at a later date if something unexpected came up.

Today TD Canada Trust is introducing additional flexible payment features that will give customers more choice and control over their lives when they really need it.

  • Pay down your mortgage ahead of schedule and have the flexibility to reduce your payments later, for up to four months

    New and renewing customers who pay down their mortgage ahead of schedule may qualify to later take advantage of a temporary reduction in their regular mortgage payment amount, an option that may be helpful in the event of short-term income reduction.

  • Pay down your mortgage ahead of schedule and have the flexibility for a payment break later, for up to four months

    By paying ahead, not only do you get the benefit of paying off your mortgage faster, you also have more flexibility and control and may qualify to take a temporary break later when you really need it. This added flexibility can make things easier in many situations such as a maternity leave, caring for a loved one or temporary job loss.

  • Pay down your mortgage on schedule and have the flexibility to defer or reduce a payment later

    A major event can throw anyone off track. If you've been paying your mortgage on schedule and are unexpectedly facing a major expense or an unanticipated reduction of income, at TD Canada Trust you may be able to defer or reduce one monthly mortgage payment a year up to four times during the life of their mortgage.

Interest continues to accrue during each of these events and is added to the outstanding balance at the time of each regular payment date.

Being financially prepared

"Many customers want to pay down their mortgage ahead of schedule and be debt-free sooner, but they worry about not having the funds available if they need them in the future," said Farhaneh Haque, Regional Sales Manager, TD Canada Trust. "Our new flexible mortgage payment features were designed with that in mind and can help customers manage their debt responsibly and provide further flexibility if financial difficulties or unforeseen life events come up in the future."

"Customers who qualify have more flexibility when paying their mortgage ahead of schedule," said Haque. "It's really the best of both worlds and makes it more comfortable to pay off your mortgage faster knowing that if circumstances change in the future you may have the flexibility to modify your payments for up to four months. If you've paid ahead and you find yourself challenged by a major change down the road, knowing you may not have to worry about paying your mortgage for a while can bring real comfort when you need it most."

How the flexible mortgage payment features work

Sandy renews the mortgage on her home, in the amount of $212,000, with a 4-year term at 4.94% interest. Her monthly principal plus interest payment is now $1,225. Sandy is up to date on her mortgage payments and decides to use her annual work bonus to make an additional lump sum payment of $4,000 in June 2011, in order to take advantage of the flexible mortgage payment features for her maternity leave. In July 2012, she takes a four-month maternity leave and qualifies to reduce the monthly principal and interest portion of her payment to as low as $225 for that period.

Li purchases a condo and obtains a mortgage for $175,000, with a 5-year term at 5.19% interest. His bi-weekly principal plus interest payment is $518. In June, July and August 2011, he decides to use extra money he's received on sales commissions to double up on his mortgage payments, resulting in a prepaid amount of $3,408, in order to take advantage of flexible mortgage payment features in the future. In 2012, he travels abroad for the summer to work in international development and qualifies to take a three-month payment vacation on his mortgage.

Karl obtains a mortgage on his townhouse, in the amount of $212,000 with a 5-year term at 5.19% interest. His monthly principal plus interest payment is $1,258. Karl makes his payments on time but does not take advantage of any of his options to pay down his mortgage ahead of schedule. In July 2012, his partner is injured and is hospitalized for two weeks. Due to resulting expenses and a brief loss of income, Karl requests the ability to skip a mortgage payment. The skipped mortgage payment ($1,258) does result in the mortgage amortization period extending beyond the original period. However, when he renews, the amortization period is adjusted back to the original period so that Karl's payment schedule is back on track.

In all cases, interest continues to accrue and is capitalized at the time of each regular mortgage payment date.

Qualifying for flexible mortgage payment features

Customers must meet the following conditions and obtain TD approval:

  • Customers' mortgage and other credit must be in good standing at all times, for all features
  • Mortgage balance must not exceed the lesser of 90% loan-to-value (LTV), or the original principal amount borrowed, for all features at the time of request
  • Customers must have made additional payments by either lump sum or increased frequency to be eligible for a prepaid reduction or vacation features.
  • Must be new mortgage customers or current customers who renew their mortgage on or after January 24th

Note that customers are required to continue to pay their realty taxes and creditor insurance payments, if applicable.

Highlights of Canadians attitudes towards flexible mortgage payment features

  • 55% of Canadians surveyed indicated that they paid their mortgage weekly, every two weeks or twice a month - and 79% of them said they did so in order to pay their mortgage off as soon as possible
  • 83% would like the ability to reduce the amount of their monthly payments during an unexpected life or work event
  • 75% would like the ability to skip a payment during an unexpected financial shortfall
  • 65% would like the ability to postpone making payments during a planned care leave or extended holiday

For more information on the features, please visit:

About the TD Canada Trust 2011 Homebuyers' Report

The TD Canada Trust 2011 Homebuyers' Report was conducted by Environics Research from December 22 to 29, 2010, through a custom, online survey. 1,001 Canadians were polled.

About TD Canada Trust

TD Canada Trust offers personal and business banking to more than 11.5 million customers. We provide a wide range of products and services from chequing and savings accounts, to credit cards, mortgages and business banking, to credit protection and travel medical insurance, as well as advice on managing everyday finances. TD Canada Trust makes banking comfortable with award-winning service and convenience through 24/7 mobile, internet, telephone and ATM banking, as well as in over 1,100 branches - most open 8 'til late and many now open Sunday. For more information, please visit: TD Canada Trust is the Canadian retail bank of TD Bank Group, the sixth largest bank in North America.

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