Real Estate

The Official Mortgage Rates Thread

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  • Jul 21st, 2018 12:13 pm
Newbie
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Apr 18, 2009
30 posts
Montreal
What interest rate should I expect for a rental property in Montreal, Quebec?
8-units (1 bed apartments), mortgage amount ~ 600k. Closing in ~ 45 days.
Can I get 5 year variable mortgages, or for rental property - I must take fixed rate mortgages?
Thanks.
Newbie
Sep 2, 2007
10 posts
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The paperwork from our lender came back with a 30 year amortization, when we had originally been thinking 25 years. (We didn't actually specify either term; an oversight.)

I recognize a 30-year amortization means lower monthly payments, but higher cost overall.

However, is there any reason not to take the 30-year, then invest the difference in payments in a tax-free account? Given the low rates, it wouldn't be too hard to earn more than the extra interest we're paying.

For the sake of argument, let's assume we have the discipline to do this.
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Sep 13, 2011
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Mooselessness wrote:
Feb 6th, 2016 10:39 am
The paperwork from our lender came back with a 30 year amortization, when we had originally been thinking 25 years. (We didn't actually specify either term; an oversight.)

I recognize a 30-year amortization means lower monthly payments, but higher cost overall.

However, is there any reason not to take the 30-year, then invest the difference in payments in a tax-free account? Given the low rates, it wouldn't be too hard to earn more than the extra interest we're paying.

For the sake of argument, let's assume we have the discipline to do this.
I agree fully with taking advantage of today's lower mortgage rates in favour of investing more money for a higher rate of return. The lowest rate on a 5 year fixed right now is 2.44%.... or even lower at 2.20% for a 3 year fixed. EQ Bank is now offering a high interest savings account with a 3% return. I'm not a financial advisor, and can only advise on the mortgages themselves, but seems like a no-brainer.

That being said, your mortgage broker can change the amortization to 25 years if thats what you want. Just ask him/her for it. Unless they had to stretch it to 30 for qualification purposes. You can also take the 30 years and then use your prepayment privileges to set your payments as though the amortization was 25 years. This would work out to being 100% identical to having a 25 year amortization. The original amortization is irrelevant once you start using your prepayment privileges.
Paul Meredith
Mortgage Broker
CityCan Financial Corp (lic. 10532)
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Apr 26, 2004
1973 posts
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GTA
Mooselessness wrote:
Feb 6th, 2016 10:39 am
The paperwork from our lender came back with a 30 year amortization, when we had originally been thinking 25 years. (We didn't actually specify either term; an oversight.)

I recognize a 30-year amortization means lower monthly payments, but higher cost overall.

However, is there any reason not to take the 30-year, then invest the difference in payments in a tax-free account? Given the low rates, it wouldn't be too hard to earn more than the extra interest we're paying.

For the sake of argument, let's assume we have the discipline to do this.
It all depends on what you want, some people prefer paying off their mortgage asap where others prefer investing. The good thing with 30 years is you can always set up your payments afterwards so they come out as if it was a 25 year amortization.
Mortgage Specialist in the GTA here to answer all your questions.
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Jan 26, 2014
45 posts
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Aevaine235 wrote:
Feb 4th, 2016 4:06 pm
I have been following this thread for over a year now but this is my first post. I have a little bit of a problem and I'm asking for your advice.

I am self-employed healthcare professional, who bought a pre-construction house at $1.2M about a year ago. I am expecting delivery in about 40 days.
Of course, as a self-employed "on paper" I don't qualify for more than a $500k mortgage. I am asking for a $950k mortgage, and I will be putting down around $250k. (20% down)
After loooongg discussions (monthss) with all the major banks and showing them all my assets/business, my true income and how I can easily afford the monthly payments on this house, the answer was simple still a NO.

Long story short, I was referred to a "B-Lender" who accepted my case at 2 yr fixed @ 3.7%!!!!

My question is: 3.7 is extremely high. However, is this my best shot? Should I accept this offer? or Is there other options out there that I still need to explore?


Thank you
Are you an incorporated physician? If so, which bank holds your corporate accounts? Probably won't find love expanding to the broker channel represented here. Banks will be your best bet.

We went through something similar but were successful. Not enough details provided to give you advice otherwise. "Delivery" of a preconstruction home is not closing and you potentially have many more months to sort out your situation.
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Feb 2, 2014
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hawki wrote:
Feb 6th, 2016 9:35 am
What interest rate should I expect for a rental property in Montreal, Quebec?
8-units (1 bed apartments), mortgage amount ~ 600k. Closing in ~ 45 days.
Can I get 5 year variable mortgages, or for rental property - I must take fixed rate mortgages?
Thanks.
In general, it is harder to qualify for a variable rate mortgage and short-term fixed rate mortgages compared to a long-term fixed (5 years or higher), because lenders use a higher qualifying rate for the former. Having said that, you can choose a variable rate mortgage for a rental property if you do in fact qualify.
Kevin Somnauth, CFA
Mortgage Agent and Real Estate Sales Representative
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Mooselessness wrote:
Feb 6th, 2016 10:39 am
The paperwork from our lender came back with a 30 year amortization, when we had originally been thinking 25 years. (We didn't actually specify either term; an oversight.)

I recognize a 30-year amortization means lower monthly payments, but higher cost overall.

However, is there any reason not to take the 30-year, then invest the difference in payments in a tax-free account? Given the low rates, it wouldn't be too hard to earn more than the extra interest we're paying.

For the sake of argument, let's assume we have the discipline to do this.
I 100% agree, given mortgage rates are so low, it would make sense to leverage as much as possible and invest (depending on your risk tolerance of course). There are lenders who also do a 35-year amortization if you really want to be aggressive.
Kevin Somnauth, CFA
Mortgage Agent and Real Estate Sales Representative
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Oslerscodes wrote:
Feb 7th, 2016 2:59 am
Are you an incorporated physician? If so, which bank holds your corporate accounts? Probably won't find love expanding to the broker channel represented here. Banks will be your best bet.

We went through something similar but were successful. Not enough details provided to give you advice otherwise. "Delivery" of a preconstruction home is not closing and you potentially have many more months to sort out your situation.
Actually the Big Banks have been very tight as of late with "stated income" mortgages. There are a few non-bank lenders that are still pretty good with stated income deals.
Kevin Somnauth, CFA
Mortgage Agent and Real Estate Sales Representative
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May 5, 2008
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What should be the best 5yr fixed rate be with the major banks...I was offered 2.86. Going to convert conventional mortgage to a heloc and segment it off for a car loan.
Is there any disadvantage of doing that?
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Sep 13, 2011
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airmail wrote:
Feb 7th, 2016 2:38 pm
What should be the best 5yr fixed rate be with the major banks...I was offered 2.86. Going to convert conventional mortgage to a heloc and segment it off for a car loan.
Is there any disadvantage of doing that?
Thats about what banks are offering these days for a 5 year fixed, but i've seen some get slightly lower. It really depends on which branch you are dealing with. One person could walk into one branch and get offered one rate while another could walk into another and get offered another. While the next person to walk into the same branches could get offered two more separate rates.

The disadvantage into segmenting your mortgage off like that is that your mortgage will become collateral. Normally at the end of your term, you can switch to whichever lender you like without cost. With a collateral mortgage, it's no longer switchable, which means a brand new mortgage would have to be registered. This would incur legal fees of approximately $800 + possible appraisal costs of around another $300.

Is there a reason why you are just concerned about rates from major banks? There are substantially lower rates available with 5 year fixed as low as 2.44%....or even lower in some cases.
Paul Meredith
Mortgage Broker
CityCan Financial Corp (lic. 10532)
Newbie
Nov 10, 2011
2 posts
Hi all,

Just looking for info on what rates are out there for a 3 year fixed or a 5 year variable on a purchase plus improvements mortgage. We are buying a house and wanting to finance an additional 10% for finishing the basement... are the rock bottom rates still available under this program?

Thanks!
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Jun 7, 2001
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PaulMeredith wrote:
Feb 5th, 2016 11:48 pm
You're balance is too low to switch to another lender, so the only thing you can do is try to negotiate with your bank. They 'should' be able to do a little better on the 3 year. Ask them for 2.49% and see what they tell you. A 20 point drop might be a little excessive to expect, however it's a starting point and they might do something for you. They really don't have to do anything here however, as they know you won't be able to go elsewhere with it.
What is typically the minimum balance to switch to another lender?

Dave
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Jan 26, 2014
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CdnRealEstateGuy wrote:
Feb 7th, 2016 10:40 am
Actually the Big Banks have been very tight as of late with "stated income" mortgages. There are a few non-bank lenders that are still pretty good with stated income deals.
NBC and RBC both seem to recognize the income potential (gross amount and stability) of recently practicing physicians - particularly if they also hold your corporate accounts. It took too much effort for BMO, TD and Scotia for me after cold calling their branches. Same with the non-bank lenders initially. We ultimately went with Meridian
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Sep 13, 2011
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joshnorman wrote:
Feb 7th, 2016 8:23 pm
Hi all,

Just looking for info on what rates are out there for a 3 year fixed or a 5 year variable on a purchase plus improvements mortgage. We are buying a house and wanting to finance an additional 10% for finishing the basement... are the rock bottom rates still available under this program?

Thanks!
You can get a 3 year fixed as low as 2.20% - 2.24%, depending on how soon your closing date is. For variable, there is a great 3 year special available at 2.15% (prime -0.55%), however with the 3 year fixed so close, it's hard to justify going variable these days.
Paul Meredith
Mortgage Broker
CityCan Financial Corp (lic. 10532)

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