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The other day a Global News newsletter subscriber stopped me on the cyber-street and asked if accelerating principal repayment is worth it. I'm sharing the answer here in case readers come across similar questions...or need an idea for a client CRM email.

The Question:

"I’ve heard that trying to pay down your mortgage is a financial myth. You need only pay your interest, and when you sell your house, the increased equity will put you further ahead than trying to pay as much of the principal as you can during the course of your amortization. It leaves you with more cash for other expenses. Is there any logic to this approach?"
—Global News Money123 subscriber

Millions of Canadians expected mortgage rates to peak this year. The historic ferocity of rate hikes, an over-leveraged consumer and a 530 bps drop in inflation made that a credible bet.

But there's a reason economic models and long-term rate forecasting don't work so well. They’re unable to price in the unexpected...such as:

After a 15-year marathon in the prime mortgage space, Home Trust is tossing in the towel.

The company—best known for being a non-prime mortgage leader—is canning its Accelerator prime mortgage lineup, effective November 15. It made the announcement to brokers on Tuesday.

According to an insider, the move was driven mainly by one thing.

Ontario's largest credit union (Canada's 2nd biggest) has pulled most of its products from the broker market.

That includes popular offerings, like:

• Contract rate qualification mortgages (which aren't stress tested the same as bank mortgages, allowing customers to qualify for bigger loans)
• Uninsured HELOCs (including Meridian's 70% #LTV# revolving HELOC, which is 5%-points more LTV than banks allow on revolving credit lines)
• Non-income qualifying mortgages.

But why did Meridian pluck these crowd-pleaser products from the broker market—while leaving them in its retail channel?

Whereas most reverse mortgage customers have wrinkles and grey hair, here's a company that will lend you money with no payments required, even if you're not old enough to drink in some countries.

The lender in question is Fraction, an innovator in the equity release space (a.k.a. reverse mortgage market).

In fact, it was so much of an innovator it had to shut down its unique lending model last year due to falling home values and "capital markets" issues. It soft launched again in July, and now it's game on, says Co-founder Hayden James.