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

  • Last Updated:
  • Nov 27th, 2017 5:07 pm
Deal Addict
Oct 15, 2008
1101 posts
153 upvotes
Cold to lock one self to 10y term.
I'm at 2.53 for 3y id rather absorb a slight increase upon renewal than lock myself willingly at 3,5
Deal Addict
Feb 7, 2006
2169 posts
692 upvotes
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.
Deal Addict
User avatar
Aug 24, 2016
2334 posts
1181 upvotes
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:
Deal Addict
User avatar
Aug 21, 2008
1077 posts
442 upvotes
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.
Deal Fanatic
User avatar
Jun 3, 2006
6819 posts
2241 upvotes
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?
The myth on the Internet is that Canadians are nice people. Those people who say this just haven't been on RFD.
Sr. Member
User avatar
Aug 9, 2007
816 posts
220 upvotes
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.
Newbie
Dec 20, 2007
97 posts
20 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
8461 posts
1395 upvotes
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.
Newbie
Jan 19, 2017
93 posts
116 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
Sr. Member
Nov 28, 2013
753 posts
249 upvotes
Quebec
10 year is long for a mortgage

Imagine the penalty if you need to brea kit
Deal Fanatic
Oct 6, 2007
5331 posts
1506 upvotes
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
3044 posts
672 upvotes
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
2843 posts
330 upvotes
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
5331 posts
1506 upvotes
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.
Member
User avatar
May 28, 2013
279 posts
130 upvotes
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.

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