Expired Hot Deals

[HSBC] Variable Rate Mortgage - Prime minus 0.96%

  • Last Updated:
  • Sep 27th, 2017 10:57 am
Deal Addict
Dec 27, 2011
1027 posts
485 upvotes
Vancouver
alanbrenton wrote:
Jul 14th, 2017 10:27 am
Nice. Immigrants are also more likely to have dealt with HSBC back home.
lmao you may be downvoted into oblivion but I appreciated it.
Sr. Member
Jan 17, 2006
601 posts
320 upvotes
Toronto
duren11 wrote:
Aug 28th, 2017 9:02 pm
To expand on this, it was introduced during the financial crisis of 2008 by Canadian banks to stop customers from jumping ship when rates started falling drastically, because you know, you signed a contract where they can change the terms at will, but you can't.

Generally they get you by calculating the difference between your current interest rate and the their posted rate at the time (not the deals they gave people at the time) over the remaining term of your mortgage. This means that it can be much higher than 5 or 7 or 9k depending on that interest delta and how much you borrowed. Essentially they want you to pay a good chunk of the interest they would have made by you breaking the contract, upfront, now. How they are allowed to use their posted rates (the high ones no one actually gets) is beyond me.

Fun fact, after 5y of a contract, they can't charge this, ie if you locked in for 7 or 10y and want out at 5y.

https://www.canadianmortgagetrends.com/ ... ntial-ird/
You will get penalized with that Interest Rate Differential (IRD) only if rates fall below what you get today. Not likely scenario for at least next few years.
Member
Jan 1, 2009
328 posts
60 upvotes
They have increased their borrowing rate to Prime - 0.81.

In terms of the big banks HSBC in my opinion is the market leader among them as they are trying to increase market share. both variable 2.14% 5 year variable and fixed 2.79%

Actually I went through the processes with the wife and i'll break down how all this works.

There are a few costs associated with a transfer, refinance when dealing with HSBC

Appraisal Costs are $300
Title insurance/ transfers are $500

if your switching from a different bank to HSBC you will incur a discharge fee, Scotia bank charged us $300 for this

Total cost in terms of fees $1100

Now what cashback and bonuses can you expect to get.

A mortgage of $150,000 and greater will let you have the advance chequing account totally free and with a referral you both would get $100.
Mortgages between $200,000 - $499,999 will net you $500 after the loan is approved
Mortgages above $500,000 are entitled to $1500 after the loan in approved

In your Advanced chequing account if you make your first deposit of $5000 in the first month of opening you'll receive $300 bonus after 90 days
Open a cash rebate Credit Card and you'll get $75 yearly no fee.

If anyone has any further questions please feel free to send me a pm and i'll try to help you out.
Looking for a suitable Mortgage Broker to join - Completed Mortgage Agent Course.
Sr. Member
User avatar
Aug 9, 2001
857 posts
3 upvotes
Toronto
I've read through all the posts, and I'm not sure if I missed it. I'm wondering if anyone has received a fixed rate from any major bank below 2.79% fixed 5 year with a HELOC? Or is 2.79% the best rate for that now?
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Member
Mar 19, 2003
473 posts
80 upvotes
Fixed and HELOC are 2 different products.

2.79 is one of the lowest, there are credit unions offering 2.7 but not sure what the stipulations are.
Newbie
Dec 1, 2008
41 posts
7 upvotes
In your Advanced chequing account if you make your first deposit of $5000 in the first month of opening you'll receive $300 bonus after 90 days

Does this mean you don't have to maintain a balance of $5000 to get $300?

I am actually switching my mortgage from a different lender, I currently pay 2.5 variable. I thought you have to maintain a balance of 5k to qualify for welcome offer but it doesn't say anywhere in terms and conditions. Please confirm
Member
Dec 21, 2004
473 posts
41 upvotes
Can someone update the current deal in the original post or a link to what's being offered? 12 pages is a fair bit.
Newbie
Aug 20, 2017
4 posts
1 upvote
No, you don't have to maintain $5000 in your advance account if you have the mortgage with hsbc.
Deal Addict
Jul 18, 2005
3200 posts
81 upvotes
I'm looking to get a rate hold until I buy. Downpayment will be greater than 20%, and mortgage 350-400k. Would this still apply, or do I have to move all my banking with them?
Jr. Member
Jun 16, 2008
131 posts
186 upvotes
Brampton
The Bank of Canada raised its benchmark interest rate by a quarter of a point to one per cent on Wednesday.
It's the second time this year that the central bank has upped the rate, after hiking it for the first time in seven years in July.
The central bank's rate has an impact on lending rates that consumers and savers get from banks on mortgages, lines of credits, savings accounts and other financial vehicles.
Newbie
Sep 20, 2016
21 posts
7 upvotes
ilim wrote:
Aug 28th, 2017 9:38 pm
You will get penalized with that Interest Rate Differential (IRD) only if rates fall below what you get today. Not likely scenario for at least next few years.
Not in my experience (RBC). As duren11 wrote above "How they are allowed to use their posted rates (the high ones no one actually gets) is beyond me."

They post outrageous 5 year rates and then offer you a "special discount" to give you a rate that is competitive with the rest of the market. So when you break the mortgage a few years in, they calculate your penalty using their posted 1,2 or 3 year rates which are much closer to market rates than the 5 year rate was when you signed up (ie. the "discount" is lower on the shorter terms but they use the larger discount you got back when you signed to "come in dry" when calculating your penalty).

The mortgage is a series of "probabilistic tricks and traps": Awesome prepayment privileges you think you will take advantage of (but probably won't) and brutal penalties you either don't understand or think you will never have to pay (but might). I suppose there is nothing inherently "wrong" with it, but you need to be thinking on a pretty high level to really get what is happening.

I got lucky and never had to break the mortgage and was able to take almost full advantage of the pre-payment options but I bet most people don't get my end of the stick.
Deal Addict
User avatar
May 6, 2007
1081 posts
131 upvotes
Was anyone able to negotiate P-.96 recently or P-.81 is now the best available rate?

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