Expired Hot Deals

[BMO] BMO 10 year fixed term mortgage at 5 year rate 3.49%

  • Last Updated:
  • Nov 27th, 2017 5:07 pm
Deal Addict
Feb 7, 2006
2522 posts
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N8Magic wrote:
Nov 20th, 2017 1:40 pm
Does refinance = renewal?
edit: Junk removed and read Hamisbrain below for the correct answer
Last edited by MMMM on Nov 20th, 2017 1:50 pm, edited 1 time in total.
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Aug 24, 2016
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We’re all a little s…
I just renewed with BMO last August, and they gave me a lower rate (2.44%) than what I had previously (2.99%) closed 5 year term.
If only they can give me same rate and lock it in for 10 years :lol:
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Aug 21, 2008
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Hamilton
N8Magic wrote:
Nov 20th, 2017 1:40 pm
Does refinance = renewal?
Not a mortgage expert, but NO.
Refinance means when you add funds/consolidate your dept into a mortgage and does not have to be on mtg renewal date. Renewal is the maturity date of a mortgage hence the current term is over, you may need to renew with new terms and conditions, close your mortgage, etc without penalty. Usually renewal rates are similar to new mortgages and lower than refinance rates.
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Jun 3, 2006
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Markham
I'm confused by the title. Some in the thread are saying a 10-year term, but title seem to say a 5-year term, with 10-year amortization?
Sr. Member
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Aug 9, 2007
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Through my experience
- A variable rate has ended up being the better deal historically, vs locking yourself into a fixed rate
- Banks have people better trained than I do, to estimate the future fluctuations in mortgage rates, and take this into account
- A mortgage broker is free to use, and will usually find you a better rate than what is posted by banks.
Jr. Member
Dec 20, 2007
108 posts
22 upvotes
vancouver
Think I’m up for renewal in a few months. What’s the best 5 year fixed people have gotten from their banks lately? I’ll be shopping around for sure.
Deal Fanatic
May 29, 2006
9237 posts
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the bank offering this tells me enough to say to not get this deal, they will never lose money, so they know by offering this rate, that over 10 years they will make more money then by you not having this rate.

that being said, its a decent rate for a long term planning, but i fully expect you will pay more over 10 years vs a 5 year rate.
Member
Jan 19, 2017
290 posts
433 upvotes
Smokealot69 wrote:
Nov 20th, 2017 1:12 pm
3.49% ?
Ewwww..
i Dont get it, its not not an "average" mortgage rate? whats so ewww about it
Deal Addict
Nov 28, 2013
1488 posts
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Quebec
10 year is long for a mortgage

Imagine the penalty if you need to brea kit
Deal Fanatic
Oct 6, 2007
6360 posts
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Kootenays
Drizzt wrote:
Nov 20th, 2017 3:41 pm
Through my experience
- A variable rate has ended up being the better deal historically, vs locking yourself into a fixed rate
- Banks have people better trained than I do, to estimate the future fluctuations in mortgage rates, and take this into account
- A mortgage broker is free to use, and will usually find you a better rate than what is posted by banks.
How long is your experience? Certainly in the past 20 years, mortgages have been on a downward trend, thus having a variable rate has paid. If mortgages go on an upward trend, it's better to lock in. My first mortgage was in 1989 and I've seen it both ways.
Deal Addict
Apr 4, 2007
3445 posts
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Montreal
Be careful with committing to long term fixed-rate mortgages if there is a chance you will be selling. Early-termination fees could be high, depending on what happens with rates (if they go down), and I've heard that some banks will calculate the penalty based on the posted interest rate rather than the discount rate you obtained (making it worse). I'm not sure of all the rules, but advise anyone to look at this carefully before jumping in as there have been some horror stories.
https://www.thestar.com/business/person ... seman.html
Deal Addict
Apr 14, 2007
2869 posts
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Montreal
Good thing I broke mine on year 4 of 5 and renewed. I paid a penalty which was equivalent of 1 month payment to go from 2.99 > 2.44 and have 4 more years at that rate fixed. That 10 yr rate isn't so bad since their 5 year is already at 3.49%

I believe it would be a great time to lock in for 10 years (I'm not going to break mine obviously) but if you're up to renewal everything is in the 3 range for 5 year and I wouldn't gamble with a variable.
Deal Fanatic
Oct 6, 2007
6360 posts
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Kootenays
rocking23nf wrote:
Nov 20th, 2017 4:11 pm
the bank offering this tells me enough to say to not get this deal, they will never lose money, so they know by offering this rate, that over 10 years they will make more money then by you not having this rate.

that being said, its a decent rate for a long term planning, but i fully expect you will pay more over 10 years vs a 5 year rate.
The bank sets its rate based on the return of 10 yr bonds. Right now, that's 1.960%. They borrow at 1.960% and lend as a mortgage at 3.49%. They don't care what happens to rates the day after they lend out the money. Their spread (in this case, 1.53%), is fixed.
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May 28, 2013
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Laval, QC
ratatapa wrote:
Nov 20th, 2017 4:16 pm
10 year is long for a mortgage

Imagine the penalty if you need to brea kit
Same penalty as a 5 years mortgage.
After 5 years it's the law, only a 3 months of interest penalty.
Sr. Member
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Aug 9, 2007
896 posts
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smacd wrote:
Nov 20th, 2017 4:19 pm
How long is your experience? Certainly in the past 20 years, mortgages have been on a downward trend, thus having a variable rate has paid. If mortgages go on an upward trend, it's better to lock in. My first mortgage was in 1989 and I've seen it both ways.
I'd be around the 20 year mark since my first mort. Part of my statement is also using my uncles advice as he watches these things carefully, and probably has another 10y on me.
On the upward trends the banks will also attempt to average that out so they aren't making less as well. The way I see it, is if you need the security of having a consistent mortgage amount every month, then go fixed, and pay the extra cost for that peace of mind. I prefer to attempt to take the cheapest route in the long term, as the fluctuation won't make or break me.
Once again, just an amateur investor/owner speaking though.

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