Beyond the Interest Rate: What You Should Know About No-Frills Mortgages

While No-Frills mortgage products typically offer a lower—or more discounted—interest rate compared to many other available products, the lower rate is really their ONLY perk.

This type of product might seem ideal if you have no plans to take advantage of features that help pay off your mortgage faster—such as pre-payment privileges, including lump-sum payments.

Essentially, this product suits:

• First-time homebuyers who want fixed payments and have limited opportunities to make lump-sum payments during the first five years of their mortgage.

  
  

• Property investors who need a low fixed rate and are not concerned with making lump-sum payments.

No-Frills products also don’t offer portability—the ability to transfer your mortgage to a new property if you move before your term ends. This feature can save you money if you find your dream home before your current term ends and rates have increased, as they often do over a five-year period.

It’s understandable why these products seem appealing. During tougher economic times, who has extra cash for lump-sum payments? And if you’re not planning to move, why worry about portability? But it’s important to remember that a lot can change over the course of five years—or whatever term you choose.

The good news is that you can still achieve great mortgage savings without sacrificing the perks of traditional mortgages. Many lenders offer significant discounts for a 30-day “quick” close.

There are other ways to secure your own discounts. For example, switching to weekly or bi-weekly payments and opting for a variable-rate mortgage while increasing payments to match the current five-year fixed rate can put you ahead of the typical 0.1% discount offered by a No-Frills product within approximately three years.

How Ezy Loan Can Help You Make the Right Choice

Choosing the right mortgage product can be overwhelming, but Ezy Loan is here to simplify the process. Our experts will walk you through the pros and cons of No-Frills mortgages compared to traditional options, ensuring you find a solution that fits your lifestyle and long-term goals.

With personalized advice and access to competitive rates, Ezy Loan helps you secure the best mortgage without sacrificing the features that matter most. Let us guide you toward smart homeownership with confidence and peace of mind.