Real Estate

The Official Mortgage Rates Thread

Deal Addict
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Dec 1, 2015
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Etobicoke, ON
Any refinance will be treated (at least at this point) the same way, regardless the LTV. What I was talking about was that the other poster (laurentreit088330) had a collateral charge which he was refinancing to move it to TD, which would again get him another collateral charge. So, any cash incentive he was getting for that deal could potentially be a wash, as the new TD mortgage would again need to be refinanced at the end of the term.
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Jun 10, 2016
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We are buying for $535,000.

We were just offered by a mortgage broker:

2.59% w/ 15% down
or
2.69% w/ 20% down

Why the higher rate for more down payment? does the broker get c omission off the CAMH insurance? Also, looking at ratehub.ca , could we possibly get a better rate?
Deal Addict
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Dec 1, 2015
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Etobicoke, ON
The absolute majority of the lenders (this has nothing to do with the broker) offer lower rates when the mortgage is insured (high ratio - any downpayment below 20%). If this is the case, you can get better rates.
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Oct 9, 2013
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Gloucester, ON
How much is it going to cost me the shed the Scotia STEP mortgage I never asked for, in one years time? Roughly $1300?
And given that I'll get crappy rates coming over from a HELOC, is a viable strategy, to sign the smallest conventional term I can so I endure the higher rates for a shorter time, and then I negotiate in a year for hopefully the most competitive?

Also, it seems from reading above, should I want a HELOC in the future, I should get a conventional mortgage and then register the HELOC component from a different lender, allowing my to continue to switch my mortgage component freely with the best rates?

I should also ask... are all scotia mortgages collateral? Is there any tact to saying, hey I never wanted this HELOC, and trying to make scotia renew me to a conventional term ask them to eat the fees, and then test the waters on a subsequent renewal?
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Dec 11, 2011
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I had a question about mortgage insurance. Lets say the bank pre-approves someone for a 450K purchase price with a 5% down payment. Does this purchase price usually take into account the mortgage insurance required by CMHC? Or does the pre-approval assume that you will be paying it upfront in cash, instead of adding it to the mortgage?
Member
Dec 11, 2003
288 posts
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Toronto, ON
Hi I have bought a condo for $470k and closing is less than 90 days. Got an approval from HSBC for the 5-year 2.35% but they need 30% downpayment for investment properties. What would be the best 5-year fixed rate out there if I only want to put 20% down?
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Sep 13, 2011
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Hawk25 wrote: I had a question about mortgage insurance. Lets say the bank pre-approves someone for a 450K purchase price with a 5% down payment. Does this purchase price usually take into account the mortgage insurance required by CMHC? Or does the pre-approval assume that you will be paying it upfront in cash, instead of adding it to the mortgage?
It's best to ask this question to the bank that preapproved you. It 'should', but I would ensure you ask them to confirm.
Paul Meredith
Mortgage Broker, Author - CityCan Financial Corp
(lic. 10532)
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Dec 5, 2004
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Who is offering 1.80% 5 year variable for high ratio? I've only been able to get 1.99% conventional mortgage with monthly pre-pay and yearly pre-pay options.
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Sep 13, 2011
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Geologic wrote: Who is offering 1.80% 5 year variable for high ratio? I've only been able to get 1.99% conventional mortgage with monthly pre-pay and yearly pre-pay options.
It's available through any regular posting broker on this board. The lender is MCAP.
Paul Meredith
Mortgage Broker, Author - CityCan Financial Corp
(lic. 10532)
Newbie
Mar 20, 2017
3 posts
valuemortgage wrote: Any refinance will be treated (at least at this point) the same way, regardless the LTV. What I was talking about was that the other poster (laurentreit088330) had a collateral charge which he was refinancing to move it to TD, which would again get him another collateral charge. So, any cash incentive he was getting for that deal could potentially be a wash, as the new TD mortgage would again need to be refinanced at the end of the term.
I have a bit of trouble following the higher cost of a collateral mortgage in this case. I (laurentreit088330) was offered 2.25% var (2.35% fixed) with about 2000$ cashback. What I understand is that at the end of the term, I will not be able to have the best rate available to a non collateral refinance (or move to another lender). This would be the potential higher cost of, let's say a difference on the next term of 2.5 % for non collateral vs 2.95 % for collateral which, if I am with TD, I would forced to take.

Now, it seems odd that today, even for collateral I still get a comparable rate that non collateral. Would I not get the same (potentially) offer at the end of my term ?

My understanding is that the higher cost of collateral is only in the rate difference at term's end, no additional costs (except maybe around 500$ for legal), is this correct ?
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Dec 1, 2015
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Etobicoke, ON
There are 2 considerations regarding that question about the collateral charge :

A - When you have that product (let's say the TD mortgage in question) and your mortgage is about to renew... if TD offers you a good rate, then all is fine. But if they do not, you may find yourself in a tough spot as a better rate offered elsewhere will come at a cost of refinance fees (normally $850.00 or so, not $500.00) plus appraisal costs plus the regular discharge fee (around $300.00). This will impact your freedom to change lenders, as the costs associated with the transfer may be higher than the potential savings elsewhere.

B - Not only you will incur those fees, but the rates you see posted here will not be available as a transfer of a collateral charge is treated as a refinance, so "regular" rates do not apply.. only specific refinance rates are available, and they are currently much higher than regular rates.

For example, someone with a mortgage with First National and looking to transfer it to Mcap would get a 5y variable as low as 1.80%, and pay only the discharge fee ($300.00).

The same client with a TD mortgage trying to move to Mcap would have to pay legal fees ($850.00) plus appraisal ($300.00) plus the discharge fee ($300.00). The real issue is that the same 5y variable product with Mcap called ValueFlex, is NOT available for refinances... so the client would only be able to get the "regular" product, at 2.30%.
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Apr 21, 2004
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Do some of the credit unions in Ontario still offer higher than the 65% LTV on HELOC's that are not on first collateral? Or have they all shifted to 65% LTV? Thank you.

http://www.mortgagebrokernews.ca/news/b ... 78640.aspx

The biggest advantage remaining with the credit unions will be their ability to provide HELOCS at 80% to borrowers. Still, a significant advantage of the credit unions, the ability for borrowers to purchase a home with little or no down payment, will be disappearing.
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Dec 1, 2015
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Etobicoke, ON
When the first bill (B20) was introduced with those limitations, it only applied to institutions regulated at the federal level... so, credit unions being under provincial regulation were not initially affected. Then, B21 came in and imposed those same rules to banks, monolines and CU as well.
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Sep 19, 2012
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Calgary
valuemortgage wrote: Not only you will incur those fees, but the rates you see posted here will not be available as a transfer of a collateral charge is treated as a refinance, so "regular" rates do not apply.. only specific refinance rates are available, and they are currently much higher than regular rates.
Again, isn't this only applicable when the mortgage is insured? If you had a 35% LTV loan today that you were looking to move, from a rate perspective it wouldn't matter if your loan was a collateral charge or not, right? Rates on uninsured refinances are the same as the rates on uninsured switches, the only difference is the legal/discharge costs of a refinance. Right?
valuemortgage wrote: When the first bill (B20) was introduced with those limitations, it only applied to institutions regulated at the federal level... so, credit unions being under provincial regulation were not initially affected. Then, B21 came in and imposed those same rules to banks, monolines and CU as well.
This is not true in Alberta. CUDGC is the CU regulator and they are not forced to abide by OSFI guidelines. HELOC LTV can be > 65% at an Alberta Credit Union.
Nikola Alaica, CPA, CA | Tax, Accounting, Mortgages
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Apr 21, 2004
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ahlaker wrote: Again, isn't this only applicable when the mortgage is insured? If you had a 35% LTV loan today that you were looking to move, from a rate perspective it wouldn't matter if your loan was a collateral charge or not, right? Rates on uninsured refinances are the same as the rates on uninsured switches, the only difference is the legal/discharge costs of a refinance. Right?



This is not true in Alberta. CUDGC is the CU regulator and they are not forced to abide by OSFI guidelines. HELOC LTV can be > 65% at an Alberta Credit Union.
Yeah, I was wondering that because nothing in B21 says that. Anyway, I don't need more than 65% LTV since I won't be using it for a long term purchase and I'll pay it down with every pay cheque. I was just wondering because since I haven't applied to any, I might as well seek a CU that offers a higher LTV.

http://www.osfi-bsif.gc.ca/eng/fi-if/rg ... 1_let.aspx

http://www.cba.ca/changes-to-canadas-mortgage-market
OSFI’s B-20 Guideline on Residential Mortgage Underwriting Policies and Procedures, which came into effect in 2012, outlines key principles for prudent mortgage underwriting that banks are required to follow. It also places limits on home equity lines of credit (HELOC). A homeowner can borrow no more than 65 per cent of the value of their property through a non-amortizing HELOC. Any additional mortgage credit beyond the 65 per cent of the property value on HELOCs should be amortized.

OSFI’s B-21 Guideline on Residential Mortgage Insurance Underwriting Policies and Procedures, which came into effect in 2015, focusses on the mortgage insurer’s interaction with lenders as part of the insurance underwriting process and includes on-going due diligence into a lender’s operations and its risk management processes.
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Feb 2, 2014
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Speedy1 wrote: National Bank
Which is a collateral charge mortgage. Keep in mind, you have to pay refinancing costs (legals and appraisal) and likely a higher rate if you ever leave them (same with TD and Tangerine).
Kevin Somnauth, CFA
Principal Broker/Owner - First Toronto Mortgage - MA (Ontario #13176, BC #X301007)
Real Estate Salesperson - Century 21 Innovative
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GerryBettman wrote: We are buying for $535,000.

We were just offered by a mortgage broker:

2.59% w/ 15% down
or
2.69% w/ 20% down

Why the higher rate for more down payment? does the broker get c omission off the CAMH insurance? Also, looking at ratehub.ca , could we possibly get a better rate?
In addition to what Andre said, the rates are pretty high. You can go as low as 2.39% 5-year fixed for an insured mortgage.
Kevin Somnauth, CFA
Principal Broker/Owner - First Toronto Mortgage - MA (Ontario #13176, BC #X301007)
Real Estate Salesperson - Century 21 Innovative
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Saleshrink wrote: How much is it going to cost me the shed the Scotia STEP mortgage I never asked for, in one years time? Roughly $1300?
And given that I'll get crappy rates coming over from a HELOC, is a viable strategy, to sign the smallest conventional term I can so I endure the higher rates for a shorter time, and then I negotiate in a year for hopefully the most competitive?

Also, it seems from reading above, should I want a HELOC in the future, I should get a conventional mortgage and then register the HELOC component from a different lender, allowing my to continue to switch my mortgage component freely with the best rates?

I should also ask... are all scotia mortgages collateral? Is there any tact to saying, hey I never wanted this HELOC, and trying to make scotia renew me to a conventional term ask them to eat the fees, and then test the waters on a subsequent renewal?
Legal fees (about $800 - $1200 depending on the lawyer)
Appraisal (about $300)

The big cost will be the higher rate. Best refinancing rates (which is what your mortgage will be deemed if you switch lenders) are higher than the best mortgage transfer rates....this is the new burden of the collateral charge mortgage.
Kevin Somnauth, CFA
Principal Broker/Owner - First Toronto Mortgage - MA (Ontario #13176, BC #X301007)
Real Estate Salesperson - Century 21 Innovative
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Geologic wrote: Who is offering 1.80% 5 year variable for high ratio? I've only been able to get 1.99% conventional mortgage with monthly pre-pay and yearly pre-pay options.
Just to add to what Paul said (as he missed the 2nd part of your question), it allows 20/20 prepayments.
Kevin Somnauth, CFA
Principal Broker/Owner - First Toronto Mortgage - MA (Ontario #13176, BC #X301007)
Real Estate Salesperson - Century 21 Innovative
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Nov 24, 2013
6479 posts
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Kingston, ON
GerryBettman wrote: We are buying for $535,000.

We were just offered by a mortgage broker:

2.59% w/ 15% down
or
2.69% w/ 20% down

Why the higher rate for more down payment? does the broker get c omission off the CAMH insurance? Also, looking at ratehub.ca , could we possibly get a better rate?
For what it's worth, the down doesn't have to be 15% or 20% on the nose. You can put 19.9% down, pay the mortgage insurance (2.4% of the 80.1%, or $10,285 in your scenario) and get the insured rate.

The math just doesn't make sense to do so. It doesn't break even. The insured rate would need to be 0.5% lower than the uninsured rate just to equal out over a 5 year term.

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