What is "Red Frog" ?$?
Envision Financial (credit union) named one of its mortgage products "Red Frog". Its like a big line of credit on your home. You must have at least 10% equity in your home to qualify for this product. The interest rate on a Red Frog mortgage is same as the prime rate, which is currently 6%. If prime rate changes, your mortgage interest rate will change. The disadvantage is that you are not getting the best rate compared to a five year closed mortgage term which can be as low as 5% (Its todays' best rate), or the 5 year variable rate mortgage wich is Prime rate minus .90% (means 5.10% today). "Red Frog" allows you to consolidate all your loans into one, including your credit card debt, line of credit, and overdraft limit etc. Interest is calculated daily on the balance of the total debt. If you deposit your pay cheque on friday in your Red Frog account you will pay less interest because your outstanding total debt will be lowered for that day. Once you withdraw funds from your acount, your total debt goes up, you will be charged interest on that ammount.
How good is Red Frog?
It depends on your personal situation, your income the size of your mortgage, your other debt amount etc. If you Can use this product wisely you can surely save some money on interest payments. Another advantage is that you save interest instead of earning interest on your savings and paying interest on your mortgage. By saving interest you don't have to pay taxes on saved interest. Talk to your mortgage broker about Red Frog Mortgages or call us at Persistent Mortgages.
Raj_
Envision Financial (credit union) named one of its mortgage products "Red Frog". Its like a big line of credit on your home. You must have at least 10% equity in your home to qualify for this product. The interest rate on a Red Frog mortgage is same as the prime rate, which is currently 6%. If prime rate changes, your mortgage interest rate will change. The disadvantage is that you are not getting the best rate compared to a five year closed mortgage term which can be as low as 5% (Its todays' best rate), or the 5 year variable rate mortgage wich is Prime rate minus .90% (means 5.10% today). "Red Frog" allows you to consolidate all your loans into one, including your credit card debt, line of credit, and overdraft limit etc. Interest is calculated daily on the balance of the total debt. If you deposit your pay cheque on friday in your Red Frog account you will pay less interest because your outstanding total debt will be lowered for that day. Once you withdraw funds from your acount, your total debt goes up, you will be charged interest on that ammount.
How good is Red Frog?
It depends on your personal situation, your income the size of your mortgage, your other debt amount etc. If you Can use this product wisely you can surely save some money on interest payments. Another advantage is that you save interest instead of earning interest on your savings and paying interest on your mortgage. By saving interest you don't have to pay taxes on saved interest. Talk to your mortgage broker about Red Frog Mortgages or call us at Persistent Mortgages.
Raj_
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