TD COLLATERAL MORTGAGES
If you have a TD mortgage, be aware that TD registers as a collateral mortgage and have since October 2010. Are you aware that you cannot transfer the mortgage to another Financial Institution even if you pay the penalty?
Some of you think that you can transfer your mortgage at end of term, but, unfortunately,you CANNOT. The TD policy is essentially that they own the clients and that the client now belong to the bank.
Imagine that a different bank has a better interest rate in 5 years from now and you will like to get that rate by transferring your mortgage...but, if you got your mortgage with TD after 2010....you cannot transfer it anymore.
The obvious down side to the policy is #1: at renewal you, the client, have NO competitive edge on rate. TD can simply offer you a new rate and without the ability to transfer to another FI you have NO choice, but stay with TD. The exception to that are an arms length sale of the property ( sell the property and pay the penalty)and a refinance (in this case you must pay lawyer fees).
Scotia Bank has the same collateral mortgage but only on their Step Program( mortgage+line of credit ) . Therefore,you cannot transfer your Scotia Line Of Credit to any FI either. Moving it to a different institution will be possible just through refinancing, hence, lawyer fees, appraisal fees etc.
Please see attached article, for more information.