moved for leave to introduce Bill C-459, An Act to amend the Interest Act (prepayment charge).
Mr. Speaker, I am pleased to introduce this bill, which is inspired by a bill that was tabled in the last Parliament by my then colleague Laurin Liu, who was the member for Rivière-des-Mille-Îles.
Breaking a mortgage contract before it comes to term triggers significant penalties. For example, if a couple signs up for a five-year mortgage to buy a $300,000 house and then gets a divorce after three years, the penalty they would be charged for the forced sale of the house could be as high as $9,000. These fees are widely panned, and they are the number one source of complaints to Canada's Ombudsman for Banking Services and Investments.
This bill will limit the penalty for breaking a mortgage early to six months' worth of interest. If anyone thinks this bill sounds a little extreme, I would point out that these fees have been banned in the United States. We believe that this is a necessary measure for protecting mortgage holders who unfortunately need to break their mortgage early, rather than letting the big banking firms pocket these fees. The bill would put an end to this exploitation.
(Motions deemed adopted, bill read the first time and printed)