Real Estate

The Official Mortgage Rates Thread

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  • May 23rd, 2018 12:05 am
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gshrfd wrote:
Feb 19th, 2016 9:44 am
This typo will scare the :eek: out of some people.
Eeeks, you're right! Thanks for bringing that to my attention. Correcting right now.
Paul Meredith
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vermit25 wrote:
Feb 19th, 2016 8:20 am
If I go ahead with the application for a new mortgage through an agent but after hearing what they offer decide I don't want to continue with him and go elsewhere:
- is this possible? as in I am not tied down to him?
Technically you are not tied down, but it's a different story if you have paid money upfront. Some agents charge a "refundable" application fee. If you go elsewhere, of course you are saying goodbye to that money of yours.
vermit25 wrote:
Feb 19th, 2016 8:20 am
- will both agents do credit checks?
- will these multiple credit checks count as a single hit?
The advice is to do your homework before choosing an agent. Don't get sucked in by the rates dangling around. Some of the rates being advertised don't even exist. The impact of credit checks only show after the checks are done, and factors other than the credit checks may also affect the impact. That being said, I have seen someone's score plummet more than 30 points after a bunch of check over a short period of time, knocking the score straight down to the sub 680 territory. The person did absolutely nothing else to damage the score.
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Dec 13, 2007
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Are there any negatives to using an effective rate advertised mortgage other than the somewhat deceptive advertising? Why should it matter when in essence the cash back they will give me results in the total payout at terms end Being equal to that advertised effective rate.

I see some on the net as low as 2.29 for five years fixed. Most though are 20 percent down maximum but I did find one broker instead using a 250k minimum requirement so it could work in my case (they are advertising 2.32 effective with an actual of 2.39 which is still lower than most)
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sonajatt wrote:
Feb 18th, 2016 3:28 pm
TD, fixed rate for renewal 300k
Do you currently have a collateral charge mortgage with TD?

If not, I would recommend switching. You can get 2.20% 3-year fixed or 2.39% 5-year fixed without any crazy conditions (ie high penalties...).
Kevin Somnauth, CFA
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FrankRH wrote:
Feb 19th, 2016 10:58 am
Are there any negatives to using an effective rate advertised mortgage other than the somewhat deceptive advertising? Why should it matter when in essence the cash back they will give me results in the total payout at terms end Being equal to that advertised effective rate.

I see some on the net as low as 2.29 for five years fixed. Most though are 20 percent down maximum but I did find one broker instead using a 250k minimum requirement so it could work in my case (they are advertising 2.32 effective with an actual of 2.39 which is still lower than most)
There are some concerns which you have to be aware of.

There was one recent poster that was given an incorrect effective rate. The contract rate (the actual rate) was higher than the rates you see on this forum, but the cashback supposedly made the effective rate very low. At the end of the day, the amount of cash they received back did not make the effective rate as low as quoted.

I have also heard of agents not giving the cash back after closing.

So basically, it's buyer beware with it.
Kevin Somnauth, CFA
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FrankRH wrote:
Feb 19th, 2016 10:58 am
Are there any negatives to using an effective rate advertised mortgage other than the somewhat deceptive advertising? Why should it matter when in essence the cash back they will give me results in the total payout at terms end Being equal to that advertised effective rate.

I see some on the net as low as 2.29 for five years fixed. Most though are 20 percent down maximum but I did find one broker instead using a 250k minimum requirement so it could work in my case (they are advertising 2.32 effective with an actual of 2.39 which is still lower than most)
Just to add a bit more to what Kevin has said, these cash backs are not regulated and are a bit of a grey area right now. I too have seen rates offered where the cash back does not cover the rate advertised and have heard of people having to fight to get their rebate. Depending on who you are dealing with, you might find it challenging to collect... or even fail to collect. This is once reason why it's important to deal with someone reputable and not just make a choice because you like the way the rate looks on paper. Personally, I find it to be a pretty misleading practice where effective rates are advertised.

Rate is just one component. The person you hire to handle your mortgage for you is equally as important. You could have a great experience dealing with your mortgage or you could have a nightmare. Don't trust something as important as your mortgage with just anyone.
Paul Meredith
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Dec 4, 2009
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Hello,

We are looking at purchasing an existing house after selling ours. Asking price is $450000 and we have $178000 to put as a down payment. The closing would be fairly quick, like less than 45 days, and wondering what the best rates are for 3 and 5 year fixed. Also wondering if the rates go down in those 45 days, what will happen. Seems like spring rates will be coming fairly soon. We are in Ottawa.
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johhny wrote:
Feb 19th, 2016 2:29 pm
Hello,

We are looking at purchasing an existing house after selling ours. Asking price is $450000 and we have $178000 to put as a down payment. The closing would be fairly quick, like less than 45 days, and wondering what the best rates are for 3 and 5 year fixed. Also wondering if the rates go down in those 45 days, what will happen. Seems like spring rates will be coming fairly soon. We are in Ottawa.
Lowest 5 year fixed closing within 45 days is 2.39%. Minimum penalty however is 2.75% of the mortgage amount, so high compared with most other non-bank lenders. For a more consumer friendly penalty, the rate would be 2.44%. There is also a great 4 year fixed available at 2.34%.

If rates drop between now and closing, you will get the lower rate. Most lenders will allow a one time rate drop when this happens.

Regarding 'spring rates', there is really no such thing. Fixed mortgage rates are determined by bond yields and nothing else and certainly not by time of year. When the bond yields are down, this puts downward pressure on rates. When they are up, it puts upward pressure on them. Although the yields have increased over the past week, rates still remain fairly stable at the moment. You can follow the bond yields yourself here: http://www.investing.com/rates-bonds/ca ... bond-yield
Paul Meredith
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Regarding effective rate mortgages and being taken advantage of by unscrupulous brokers, one would think if you are able to calculate the numbers to ensure the cash back covers the the higher actual rate difference and then get it in writing, I don't see how one can get duped... or is there?
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FrankRH wrote:
Feb 19th, 2016 7:00 pm
Regarding effective rate mortgages and being taken advantage of by unscrupulous brokers, one would think if you are able to calculate the numbers to ensure the cash back covers the the higher actual rate difference and then get it in writing, I don't see how one can get duped... or is there?
The calculation isn't as simple as you think. The 'obvious' calculation would be to just calculate the difference is payments and then multiple that by how many payments there are in the term, but that will give you a number lower than what it should be. You can get the correct numbers here: http://www.mortgagecalculatortoolkit.co ... alculator/

Again, one of the biggest mistakes someone can make is choosing someone to handle something as important as their mortgage based on rate and rate alone. So make sure you ask a lot of questions to ensure you feel comfortable with the individual who is handling your mortgage.

Here are some good questions to ask:

1. How long have you been doing this for?
I would look for someone who has been in the business full-time for at least a couple of years. If they have been doing it less than that then it doesn’t necessarily mean they are bad, but you may want to ask a few more questions. You can also ask how many mortgages they have closed, or who they are working under. Make sure they have a go to person who is qualified if they don't have all the answers and how long it might take for them to get the answers to your questions. It’s up to you if you want to deal with someone who is newer, but it might be harder for you to get the right advice from them. Like anyone else you're considering, you want to get a feel for them and their knowledge, and make sure you do your own research on their advice as well. Google can be a great ally to you.

2. Do you do this full or part time?
There are many people in this industry working part time. The person you are working with should be committed to mortgages and their mind is on YOU, and not on their other income source. It is also very unlikely that a part-timer would have that much experience, and you may have trouble reaching them if they are busy working their full-time job.

3. Do you have any references or testimonials?
It is always good to know that the professional you choose has a history of satisfied clients. If they have done a good job for their clients in the past, there is a better chance that they will do a great job for you as well.

4. What kind of education or licensing do you have?
Some professionals will have more education or training than others. Brokers are licensed and bank specialists are typically not. Not being licensed isn’t a deal breaker, but you definitely want to get a feel for what kind of training that persion has been provided with. Chances are if they have been specializing in mortgages for years, then they should have a pretty good grasp on things. Just never make that assumption without feeling them out first.

5. How easy are you to get a hold of? How quickly do you return calls or emails?
There are going to be times when you have questions or concerns, and you are going to want to have them answered quickly. I’ve heard stories from my clients where they have been leaving messages for their mortgage broker or bank mortgage specialist for days or even weeks without a response. Nothing can be more frustrating. Not exactly what I would call professional or courteous service.

6. What hours are you available?
It can be helpful to know that the person you are dealing with is can be flexible and is willing to work with YOUR schedule, not theirs. If you’re typically not available or hard to reach during the day, then you might want to consider using someone who is available at times convenient to you. Having questions answered promptly will give you a significantly better experience. It’s not fun when you have a concern and you are not able to reach your mortgage professional.

7. How do you get most of your business?
Ideally, most of their business should come from referrals. You want to know that their past clients are happy enough with their services that they are referring them to their friends and family. If a professional isn’t doing a very good job for their clients, then they aren’t going to have too many referrals.

8. How are fixed mortgage rates determined?
This is simply a question to gauge their competence level and is something that any quality mortgage professional will know right away. If they can’t answer this, or if they have to ‘get back to you’, then I would move on to the next person. (The answer is bond yields.)

9. Do you do anything else for the branch other than mortgages?
This question is for bank branch staff only and does not apply to mortgage brokers. The goal here is to determine you are dealing with a true mortgage specialist. If they also tell you they do financial planning, then they are not a true specialist. Make sure you are dealing with someone where they specialize in mortgages and mortgages only.

Asking a lot of questions can save you a lot of headache down the road. Make sure you go in as an informed and educated borrower and you'll end up with a much better experience along the way.
Paul Meredith
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CityCan Financial Corp (lic. 10532)
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Dec 6, 2006
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My mortgage is due for renewal in May. RBC called and offered me Prime -0.4 on a 5yr variable.

I know I can do better with a smaller lender but is this good for a bank offer?
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Jungle Monkey wrote:
Feb 19th, 2016 9:00 pm
My mortgage is due for renewal in May. RBC called and offered me Prime -0.4 on a 5yr variable.

I know I can do better with a smaller lender but is this good for a bank offer?
You can get a mortgage as low as P-.60% on a 5-year variable. If you have a standard charge (NOT a product with a combined HELOC and mortgage), then the only cost is RBC's discharge fee (approx $300).
Kevin Somnauth, CFA
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My mortgage is current with Scotia at 3.49 5yr fixed expiring end of Oct. We got it when we purchased our first house. We pay our property tax with it and do not have a line of credit. At that time we had quite the life events happening and went in with very much an out of sight out of mind approach. This time I'd like to do better. So a few questions for the experts...

1) When should I start looking? We want to leave Scotia for sure but no lender preference.
2) Should I use a broker or go straight to banks? If I use the former, can I still do the latter?
3) We plan to stay in this house at least 2 more years but may move within 5. Should we stick with 5yr or go to 2-3?
4) Can I lock in a rate before Oct 31?
5) We'd like to get a secured line of credit this time. What affect does this have to the mortgage itself if any? Aside from as security.

Thank you!
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CdnRealEstateGuy wrote:
Feb 20th, 2016 11:11 am
You can get a mortgage as low as P-.60% on a 5-year variable. If you have a standard charge (NOT a product with a combined HELOC and mortgage), then the only cost is RBC's discharge fee (approx $300).
I'm currently on the RBC Homeline plan. Is that a HELOC?

If so, what are my costs to break that at the end of my term come May?
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azia wrote:
Feb 20th, 2016 12:22 pm
My mortgage is current with Scotia at 3.49 5yr fixed expiring end of Oct. We got it when we purchased our first house. We pay our property tax with it and do not have a line of credit. At that time we had quite the life events happening and went in with very much an out of sight out of mind approach. This time I'd like to do better. So a few questions for the experts...

1) When should I start looking? We want to leave Scotia for sure but no lender preference.
2) Should I use a broker or go straight to banks? If I use the former, can I still do the latter?
3) We plan to stay in this house at least 2 more years but may move within 5. Should we stick with 5yr or go to 2-3?
4) Can I lock in a rate before Oct 31?
5) We'd like to get a secured line of credit this time. What affect does this have to the mortgage itself if any? Aside from as security.

Thank you!
1- I would suggest your start looking 90 days from your renewal date, usually you can get the best rates between 30-90 days of your closing.

2- you should use what your comfortable with, plenty of people on here work for both industries, you choose what your comfortable with and who prefer provide you the best service.

3- if you're unsure I suggest doing a 2-3 year rate, if you do a 5 year you can always port it over(if they allow it) Some banks won't even charge you a penalty if your new place has double the mortgage of your previous place, not many people know this but this can end up saving you thousands in penalties.

4- you can lock in a rate prior to October 31st.

5- heloc mortgage will change your charge to a collateral and when your mortgage is over a discharge fee of 350 will be charged to you. You can take up to 80% of the homes value if you have a mortgage attached to it, the whole point of a HELOC is to have access to funds at all times.
Mortgage Specialist in the GTA here to answer all your questions.

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