MCAP has entered the no-frills mortgage market with a brand new product. It’s called the MCAP Value Mortgage.
The Value Mortgage is designed for folks without the desire or means to pre-pay their mortgage. First-time homebuyers are a prime example.
The product will be launched on Monday at a rate of 3.59%. That’s at least 1/4% below typical 5-year fixed rates. Over five years, this equates to an interest savings of roughly $1,189 on a $100,000 mortgage with 25-year amortization.
So what’s the tradeoff? To get the rate down, MCAP had to throw out some extras. Specifically:
There are no lump-sum pre-payments (although you can have accelerated payments and also increase them up to 10% per year)
It is fully closed (i.e., no refinancing and no breaking for five years unless due to a bona fide sale of the property)
There are no pre-approvals
Generally speaking, no-frills mortgages have slowly been picking up steam. Industrial Alliance (INALCO) has a version that is advertised around the web for under 3.65%. That’s given the limited number of INALCO-approved brokers a huge marketing advantage. MCAP has now leveled the playing field a bit, enabling far more brokers to market rock-bottom rates.
Here are more details on the product:
Business type: New purchases or refinances (No transfers. New business only.)
Rate Guarantee: 30 days
Term: 5 years
Occupancy: Owner occupied only (rentals and second homes not allowed)