Real Estate

The Official Mortgage Rates Thread

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Nov 2, 2003
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if you go off to the bank and start telling them you want to buy a property as a rental, some banks will only lend you 65% instead of 80%.
but as paulmeredith said, if you keep your mouth shut...
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Jul 16, 2003
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It is not just "keeping your mouth shut"... often, you will be required to sign an affidavit at your lawyer saying the property will be owner occupied. From a legal standpoint, the client is lying and if the lender finds out that could be considered a breach of contract. There could be serious legal implications.
Andre Oliveira - Mortgage Agent
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Jul 24, 2011
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Hi Guys, got a possession date of a douplex of 60 days, prop Val $326k and putting down north of 10%, Im in AB. please PM me your rates.

Thanks!
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May 16, 2011
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laptop-tech wrote: It is not just "keeping your mouth shut"... often, you will be required to sign an affidavit at your lawyer saying the property will be owner occupied. From a legal standpoint, the client is lying and if the lender finds out that could be considered a breach of contract. There could be serious legal implications.

I think paulmeredth meant "keep your mouth shut" in a different context. The question was basically what does an honest person, with such a mortgage clause, do if they want to convert their principle residence to a rental after having legitimatley used it for a while as a principle residence! There is a difference between lying about your intentions of wanting a mortgage for investemnt property rather than your place of residence, and legitimatley deciding to move into a new residence once you have lived, for a year +, in a house that you dont want to sell.
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QuietReign - I know that. In any case, the point is that in either case the client would have signed a document stating the residence is meant to be owner occupied.. if after living there for X period of time the client decides to make it a rental, he might still be breaking the terms of the contract he signed with the lender, therefore risking the legal implications.

A simple example : there is one major lender with a specific product (Heloc) that can only be used on the primary residence. If the client gets that Heloc, lives in the property for X years and then rents it out, he should notify the bank as the bank clearly does not lend on Helocs to rental properties. If the lender finds out, they have the right to demand the entire loan amount to be paid right away, or converted to a mortgage.
Andre Oliveira - Mortgage Agent
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Nov 29, 2006
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I have 3 years left on p-.3% mortgage of around $300k with rbc. A friend is seeking to sell his house and I'd like to purchase it. what costs should I expect with porting my mortgage if I chose to move?
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Most lenders would not charge any fees to port a mortgage. Keep in mind that policies vary from lender to lender (how long you can wait between closings, etc) so you have to check with your lender to make sure your situation fits in their guidelines. But generally speaking, you do not pay any fees to simply port a mortgage. I ported mine 3 times and never paid any fees. Of course, you still have to pay your lawyer fees, title insurance, etc.
Andre Oliveira - Mortgage Agent
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Sep 13, 2011
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laptop-tech wrote: QuietReign - I know that. In any case, the point is that in either case the client would have signed a document stating the residence is meant to be owner occupied.. if after living there for X period of time the client decides to make it a rental, he might still be breaking the terms of the contract he signed with the lender, therefore risking the legal implications.

A simple example : there is one major lender with a specific product (Heloc) that can only be used on the primary residence. If the client gets that Heloc, lives in the property for X years and then rents it out, he should notify the bank as the bank clearly does not lend on Helocs to rental properties. If the lender finds out, they have the right to demand the entire loan amount to be paid right away, or converted to a mortgage.
..and I think that would be about the worst thing that could possibly happen.
Paul Meredith
Mortgage Broker, Author - CityCan Financial Corp
(lic. 10532)
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QuietReign wrote: I think paulmeredth meant "keep your mouth shut" in a different context. The question was basically what does an honest person, with such a mortgage clause, do if they want to convert their principle residence to a rental after having legitimatley used it for a while as a principle residence! There is a difference between lying about your intentions of wanting a mortgage for investemnt property rather than your place of residence, and legitimatley deciding to move into a new residence once you have lived, for a year +, in a house that you dont want to sell.
Just to clarify, I never said 'keep your mouth shut'. I said that most people will just convert it without saying anything to their bank and that unlikely they will find out. I'm not however suggesting to do that. I myself even told the bank after I switched my property to a rental and that was about as far as it went. It's always best to your lender before you decide to convert to a rental property to find out what their policy is on it first. Always best to keep things 'above board' as the last thing you want is ugly surprises.
Paul Meredith
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(lic. 10532)
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Oct 8, 2006
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I know some of you are looking to buy homes very soon. I am going to go 'shopping' tommorow and this weekend to see what I can get. I am wondering what I should be looking for.

I'm leaning towards a variable (closed) - 5 years <--- is this what people usually get if just buying a home for the first time. Or is 2-3 years better?

Does open mean no fee if I choose to change to a fixed or a new variable rate?

Also what rate are you guys getting for a preapproval?
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killoverme wrote: I know some of you are looking to buy homes very soon. I am going to go 'shopping' tommorow and this weekend to see what I can get. I am wondering what I should be looking for.

I'm leaning towards a variable (closed) - 5 years <--- is this what people usually get if just buying a home for the first time. Or is 2-3 years better?

Does open mean no fee if I choose to change to a fixed or a new variable rate?

Also what rate are you guys getting for a preapproval?
There is no standard rate or product that people usually get as first time homebuyers. It really depends on the person. I could suggest for one of my clients to go with a 5 year fixed, then on the very next call suggest variable, and the call after that, 2 or 3 year fixed. It really depends on their situation. Some things to consider before making a decision:

- are you single or married? If single, you will most likely not always be that way. How could that change your situation over the next couple of years? You may want to sell and buy something else with your significant other.
- is there any chance you could be moving out of the province or country? This is something that would most like cause you to break your mortgage early.
- How do you feel about having a rate and payment that could change? Are you okay with not knowing what your monthly or biweekly payment will be in a couple of years? If you aren't comfortable with that, then fixed might be a better option for you. There are many people that don't mind paying a bit more for the piece of mind in knowing that their rate and payment will remain the same throughout the term.

There is a lot to consider before making a decision on product.

'Open' means that you can pay off the mortgage at any time without any penalty. It doesn't mean you can switch products at anytime. To do so, a new mortgage would need to be registered. There aren't very many attractive open mortgage products available. They usually come with higher rates. A line of credit is probably the best open product available, which is prime +0.50%. There is nothing more competitive than that right now, and you would need to have rather unique circumstances for me to suggest something like this.

For pre approval, you aren't going to get the lowest rate out there. Most likely around 3.49% for a 5 year fixed. Compare that with the lowest 5 year fixed available of 3.09%, which is available once you have already found something. Similar for 5 year variable. prime -0.40% for pre approval vs. as low as prime -0.65% for full approval.

Hope this helps. Good luck!
Paul Meredith
Mortgage Broker, Author - CityCan Financial Corp
(lic. 10532)
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Mar 19, 2009
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PaulMeredith wrote: A line of credit is probably the best open product available, which is prime -0.50%.
Paul, are you talking about HELOC? Who is offering P-0.5%?
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sergnos wrote: Paul, are you talking about HELOC? Who is offering P-0.5%?
Ooops, my mistake! That was supposed to say 'prime +0.50%. Thanks for bringing that to my attention! Corrected.
Paul Meredith
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Nov 14, 2005
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Toronto
We're getting closing to the magical 2.99% fixed.

Another lender has dropped their 5 year rate to 3.09%, good for purchases transfers and refinances.

Conditions
1) 20% prepayment privileges
2) 45 date rate hold
3) Normal IRD or 3 month interest penalty
4) portable, Bridge financing offered
5) High Ratio & Conventional under 75%
_______________
Shawn Stillman, CA, CPA Mortgage Broker
Mortgage Outlet Inc. 12628 (FSCO - Ontario), X300374 (FICOM - BC), MW-1411078 (RECA - Alberta)
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Aug 26, 2003
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callmethecat wrote: We're getting closing to the magical 2.99% fixed.

Another lender has dropped their 5 year rate to 3.09%, good for purchases transfers and refinances.

Conditions
1) 20% prepayment privileges
2) 45 date rate hold
3) Normal IRD or 3 month interest penalty
4) portable, Bridge financing offered
5) High Ratio & Conventional under 75%
I hope that bond yields continue to trend downwards (currently at 1.56 as I type this) and that more lenders start dropping their rates.

Too bad it wasn't a 120 day hold or else, I would be ready for it in less than 2 weeks!!

Can you elaborate on the prepayment privileges? I currently have it but never did get around to taking advantage of it. However, I do intend on taking advantage come the next mortgage.

For example, if prepayment privileges are indicated as 15/15 or 20/20 - does that mean the mortgagee can prepay an additional 15/20 per cent of the weekly/bi-weekly/monthly mortgage amount (principal and interest amount) directly towards the principal? And that privilege would apply on an annual basis (on anniversary date) towards the principal as well??

Also, if someone can confirm my understanding that (if the purpose and intent was to pay the mortgage down as quickly as possible) applying both strategies and maximizing it at every opportunity available would be the best course of action?

Thanks
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Oct 8, 2006
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Thanks lots of good information =)
PaulMeredith wrote: There is no standard rate or product that people usually get as first time homebuyers. It really depends on the person. I could suggest for one of my clients to go with a 5 year fixed, then on the very next call suggest variable, and the call after that, 2 or 3 year fixed. It really depends on their situation. Some things to consider before making a decision:

- are you single or married? If single, you will most likely not always be that way. How could that change your situation over the next couple of years? You may want to sell and buy something else with your significant other.
- is there any chance you could be moving out of the province or country? This is something that would most like cause you to break your mortgage early.
- How do you feel about having a rate and payment that could change? Are you okay with not knowing what your monthly or biweekly payment will be in a couple of years? If you aren't comfortable with that, then fixed might be a better option for you. There are many people that don't mind paying a bit more for the piece of mind in knowing that their rate and payment will remain the same throughout the term.

There is a lot to consider before making a decision on product.

'Open' means that you can pay off the mortgage at any time without any penalty. It doesn't mean you can switch products at anytime. To do so, a new mortgage would need to be registered. There aren't very many attractive open mortgage products available. They usually come with higher rates. A line of credit is probably the best open product available, which is prime +0.50%. There is nothing more competitive than that right now, and you would need to have rather unique circumstances for me to suggest something like this.

For pre approval, you aren't going to get the lowest rate out there. Most likely around 3.49% for a 5 year fixed. Compare that with the lowest 5 year fixed available of 3.09%, which is available once you have already found something. Similar for 5 year variable. prime -0.40% for pre approval vs. as low as prime -0.65% for full approval.

Hope this helps. Good luck!
Newbie
Jan 22, 2014
76 posts
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Toronto
Just got 2.40% 2 year fixed with CIBC.

I get 10% of principal max payment each year ontop of monthly payment, and can double any month's payment. Didn't look like there were any other pay down options.
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Nov 14, 2005
1188 posts
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Toronto
killoverme wrote: what does 45 date rate hold mean?
HCaulfield wrote: I hope that bond yields continue to trend downwards (currently at 1.56 as I type this) and that more lenders start dropping their rates.

Too bad it wasn't a 120 day hold or else, I would be ready for it in less than 2 weeks!!

Can you elaborate on the prepayment privileges? I currently have it but never did get around to taking advantage of it. However, I do intend on taking advantage come the next mortgage.

For example, if prepayment privileges are indicated as 15/15 or 20/20 - does that mean the mortgagee can prepay an additional 15/20 per cent of the weekly/bi-weekly/monthly mortgage amount (principal and interest amount) directly towards the principal? And that privilege would apply on an annual basis (on anniversary date) towards the principal as well??

Also, if someone can confirm my understanding that (if the purpose and intent was to pay the mortgage down as quickly as possible) applying both strategies and maximizing it at every opportunity available would be the best course of action?

Thanks
The 45 day rate hold means this mortgage rate is good for the next 45 days (March 17th as of Jan 31st), so it could be consider quick close/

20/20 prepayment privileges means
1) You can make a 20% annual prepayment to your mortgage principal - so if you borrow 100k you could make a 20k prepayment each year. Most lenders have a minimum amount, they range from $100 to $1000 and allow unlimited payments as long as you don't exceed the 20% annual total. Some lenders base it on calendar year, others on contract year so it's important to know the fine print.

2) You can increase your monthly payments by 20% on an annual basis, so if your payments are $1,000 in year 1 you could bump it to $1,200, then $1,400 in year 2, etc.... This additional payment would be applied directly to the principal.

If you max out both #1 & #2 you could be mortgage free in 4 years.
_______________
Shawn Stillman, CA, CPA Mortgage Broker
Mortgage Outlet Inc. 12628 (FSCO - Ontario), X300374 (FICOM - BC), MW-1411078 (RECA - Alberta)

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