Let's compare costs of a $50,000 deposit loan for a 3 month term with a typical second mortgage.
Deposit loan | Second mortgage | |
---|---|---|
Interest rate | 12% per year $1,500 |
12% per year $1,500 |
Lender fee | $2,500 (5%) | $1,000 (2%) |
Broker fee | - | $1,000 (2%) |
Legal fees | - | $2,500 |
Appraisal | - | $400 |
Discharge fee | - | $300 |
Penalties | No | Possible |
Monthly payments | No | Yes |
Credit check | No | Yes |
Registered on title | No | Yes |
Funding time | 1-2 days | 1-3 weeks |
Total cost | $4,000 | $6,700 |
Total cost of a $50,000 second mortgage is 67.5% more expensive than a deposit loan. Based on a typical cost for a second mortgage, without any potential penalties.