Case Studies


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Paying mortgage off too early may mean paying a penalty

Posted on Friday, January 19, 2018 01:30 PM

Key Learnings: 

  • Make sure any verbal agreements you make with your financial institution are reflected in writing. 
  • Be aware of any potential prepayment penalties prior to paying off a loan in full. 

In December 2010, Mr. B got a five-year fixed closed term mortgage at a rate of 3.44% with his bank. In 2013, midway through the term, the branch manager suggested switching to a “blend and extend” mortgage. This would reduce the interest rate by 0.22% but extend the maturity date to 2018....

Setting up a non-arm’s length mortgage (NALM)

Posted on Friday, October 20, 2017 11:15 PM

Key Learnings:

  • When purchasing a home using a NALM, ensure the funds are in place first 
  • Understand that transfer of in-kind investments can take longer than expected 

In late 2014, Mr. and Ms. J inquired about a non-arm’s length mortgage (NALM) at their bank. A NALM is where you lend money from your registered savings plans or locked-in savings plans to yourself as an individual or as a co-borrower with someone who is related by blood or marriage. 

At that time, they opened an RRSP account...

How OBSI may compensate for non-financial harm

Posted on Thursday, September 14, 2017 03:15 PM

Key Learnings:

  • OBSI will compensate clients for non-financial harm where appropriate. 

Mr. and Ms. S invested in an exempt market fund.  The fund was comprised of a pool of mortgages.  The fund experienced financial and management difficulties.  As a result a large number of investors tried to sell their shares causing the value of the fund to plummet.  Ultimately, the fund was subject to a cease trade order. The only way investors could receive any money back was through a...

Monitoring your RESP Statements

Posted on Wednesday, September 06, 2017 03:45 PM

Key Learnings:

  • Follow up on all the financial decisions you make with your investor or advisor.
  • Always read your investment statements carefully so that you are aware of how your investments are doing and can make any necessary corrections in a timely manner.

Mr. and Ms. L set up an RESP for their son with a Scholarship Plan Dealer in 2004. During the winter of 2005 the couple received a Canadian Education Savings Grant (CESG) application from the firm to fill out on behalf of their son. Shortly after,...

Interest Rate Debate

Posted on Wednesday, August 16, 2017 04:45 PM

Key Learnings:

  • Refer to your account agreement to ensure you have the correct interest rate and relevant information. If something seems too good to be true, it probably is. 

Ms. L opened both a chequing account and a savings account with her bank. During a call with the customer contact centre, she asked whether the savings account interest rate of 1.25% was monthly or annual. The representative said Ms. L would receive 1.25% per month (which is equal to over 16% per year). Later that same month,...

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