Is a Cash Back Mortgage Right for You?

Cash back on real estate and mortgages in the GTA is, on the surface, an attractive proposition. It's an efficient way to get additional cash when you are finalizing your mortgage. This money can then be put towards the many extra costs that occur around a house purchase, as well as renovations or even buying furniture. The lump sum payment can typically range from 1 to 7% of your mortgage - 5% being the average.

At a time when money is tight and pocketbooks are stretched, an infusion of cash can be a welcome thing. But, as with just about everything in life, there are drawbacks.

A cash back mortgage's interest rate is higher than with a conventional mortgage - on average 1.75% more. At a time when interest rates are rising, this is a serious consideration. Get the old calculator out - and you will discover that you will end up paying a lot more on your mortgage than amount of the cash back money you received up front.

Also, if you break your mortgage early, you must pay back a portion of that cashback amount. If a cash back mortgage is changed during its term, or refinanced, the initial cash back must be prepaid - and that can include a penalty or repayment premium. And because the cash back money arrives AFTER closing, it cannot be used in the down payment on your new home.

The process of financing a house purchase is often the biggest economic decision people make. Getting the best financing deal for the purchase is integral to the process and often requires the services of a mortgage broker.

One such company is Dominion Lending Centres. With offices across the Greater Toronto Area and “snowbird branches” in southern Florida Dominion provides a seamless mortgage process and unbeatable mortgage rates for its clients.

How does it accomplish this? Dominion has access to over 100 lending companies, which means that clients can have immediate access to the best rate going. Dominion is also committed to the fine print in these transactions clear to their clients. Their stated objective is to ensure total transparency for clients of hidden fees and costs buried in the mortgage.

Knowledge is power, of course, and Dominion will also advise on the type of mortgage and, in particular, if a cash back one is advisable or even applicable to the purchaser's situation..

Dominion Lending Centres is partnered with Shop2Save - and this opens a whole new avenue of savings. Shop2Save has a simple premise: you should be rewarded for making purchases through its app. Whether you are buying consumer goods or household products, you can fill your e-wallet with money. Every purchase you make is rewarded with dollars loaded to your Amazon Gift card - and not confusing points that vary from store to store.

And, because of its partnership with Dominion Lending Centres, the Shop2Save points system includes cash back real estate mortgages in the GTA.