Fees Glorious Fees

I have kept the documents to our first house purchase in Canada from 1988, mainly to remind me of how much naivety two little people can have when making a purchase, sorry, the major purchase of a short lifetime to that point.

The promissory note, for a loan of eight thousand dollars actually outlined that we would be paying a loan rate of  sixteen and a half percent, payment of one hundred and nine dollars per month. I sit here with simple calculator in hand and see that in rough terms, that interest rate and that principal would be about thirteen hundred and twenty bucks over the year, and we signed up to pay almost exactly that.

So at the end of the one year term we would owe almost exactly the same amount.

The commission, or originating fee was four hundred and ninety-five dollars. The first mortgage "administration fee" was two hundred and fifty dollars. Add to this our legal fees (which were supposed to be four hundred dollars but ended up almost twice that) and mortgage insurance premium of twenty-two hundred and fifty dollars.

At the end of the year, when we paid off the principal on that second mortgage we were delighted to see another discharge or closing fee of one hundred and seventy-five dollars. I think Karen had to pay another fee at the land transfer office, oh and when we paid off that first mortgage in 1995, she had to pay again.

Over a barrel.

All of this was not really a nightmare, it was an essential part of our financial education, it was sowing the seeds for all the work we would do in the early nineties, the fortunate first kick in the head that was partially a catalyst to financial common sense.

Of course, it would not be the last kick in the head.