Real Estate

The Official Mortgage Rates Thread

  • Last Updated:
  • Mar 26th, 2017 1:36 pm
Deal Addict
Sep 20, 2006
1057 posts
261 upvotes
Winnipeg
skunkyjosh wrote:
Feb 13th, 2016 2:26 am
You need to understand that some people in Canada enjoy "one bank one stop" mentality and that they enjoy to see everything on their same online banking.

Then if you look further into the matter of "5 big banks" vs "credit unions and virtual bank", you will realize that the big banks are the base of the Canadian economy and if people wouldn't do business with them, we would be much weaker internationally speaking, isn't our Canadian dollar already super weak?!

Of course, I understand that as tempting as it could be dealing with brokers to save a few thousands, in the end you have to go with someone you trust and sometimes people would rather deal with a trusted bank versus a broker from a company they never heard of before regardless if they still get you the loan through a big bank. Yes people are scare of being defrauded, this is the reality in the years post-2000.

I have nothing against brokers, they just need to find their own way to seal a trust with their clients. In the end, they are just like the mortgage specialist from the big banks and they pretty much get paid 100% from sales commission.
Feel free to go with the big banks if you like paying more and getting killed on charges when you need to get out of a mortgage early. :facepalm:
Lorenzo
Member
User avatar
Mar 9, 2012
476 posts
139 upvotes
lorenzo1000 wrote:
Feb 14th, 2016 11:31 pm
Feel free to go with the big banks if you like paying more and getting killed on charges when you need to get out of a mortgage early. :facepalm:
What you mean? It should be the sams penalty with the big bank than with a broker when I leave my 5-years variable closed mortgage @ P-0.75, which is 3 months of interest. I'm not sure what extra charges you are referring to?
Newbie
Sep 2, 2007
79 posts
22 upvotes
I am not advocating broker channel or banks but from My limited experience and what I read is some brokers push bank financing anyways ie TD, Scotia etc. I heard that some brokers may make up $800 per $100,000 lent so you may not get the best lender for you but what may pay him the most. Also you may be pushed to borrow more than what you need too.....

Just check rates to make sure you are comfortable with the broker/bank AND the product AND the lender. You must do your due diligence so don't blindly let some promote a product that does not meet your specific needs. There are allot of online brokers and brick and mortar ones and bank mortgage specialists so engage each until you find a good fit.

Check online rate sites to compare as well
Deal Addict
Sep 13, 2011
2865 posts
812 upvotes
Toronto
Liberator wrote:
Feb 15th, 2016 12:18 am
I am not advocating broker channel or banks but from My limited experience and what I read is some brokers push bank financing anyways ie TD, Scotia etc. I heard that some brokers may make up $800 per $100,000 lent so you may not get the best lender for you but what may pay him the most. Also you may be pushed to borrow more than what you need too.....

Just check rates to make sure you are comfortable with the broker/bank AND the product AND the lender. You must do your due diligence so don't blindly let some promote a product that does not meet your specific needs. There are allot of online brokers and brick and mortar ones and bank mortgage specialists so engage each until you find a good fit.

Check online rate sites to compare as well
I didn't mention compensation as a con to brokers conciously as this also happens with banks. They will often give their staff an incentive for pushing one product over another if that product is more profitable for them. This happened a lot on both sides a few years ago when 10 year mortgages dipped below 4%. Both banks and brokers were heavily pushing it telling their clients that it's a great way to protect yourself against higher rates. Great way for them to pad their own wallet maybe. Myself as well as the other regular posting brokers on this board always strongly advised against 10 year mortgages. Another example is a bank pushing you to take a HELOC with your mortgage whether you need it or not. This turns your mortgage into a collateral mortgage regardless of lender making it harder for you to leave they bank. CIBC in particular loves to push their clients into cash back mortgages., which is highly profitable for them since their cash back mortgage is the harshest to break of all lenders including other banks.

A truly good broker will be happy I have your business and willl help you to choose the procduct that is right for you without much thought on comp. . Like I said before, there are good and bad on each side.
Paul Meredith
Mortgage Broker
CityCan Financial Corp (lic. 10532)
Newbie
Sep 2, 2007
79 posts
22 upvotes
Well said Paul

This has been my experience thus far. I spoke with a few banks and then asked a broker specifically for a few standard charge fixed term mortgages on investment properties. after providing all my financials, assets, liabilities and income details, I was offered rates that were comparable to bank rates that was offered to me by my own bank. It was just another bank with bank rates, penalties etc!

Even bank field Mortgage Specialists are commission driven too ie. No lending, no compensation so they are keen to lock you down. The lower the rate, the less commission from my understanding too

I was told because we have several properties, I had limited options as most lenders just want principle residence mortgages. I was pushed to Get a collateral mortgage Heloc with fixed term component and revolving portion with a bank to access max equity on our properties even though I didn't need nor want it.

What lenders offer investment property mortgages?

How many doors will they allow owners to have?

What is a good secured Heloc rate now pls? Is prime plus 0.25 still available?


PaulMeredith wrote:
Feb 15th, 2016 9:14 am
I didn't mention compensation as a con to brokers conciously as this also happens with banks. They will often give their staff an incentive for pushing one product over another if that product is more profitable for them. This happened a lot on both sides a few years ago when 10 year mortgages dipped below 4%. Both banks and brokers were heavily pushing it telling their clients that it's a great way to protect yourself against higher rates. Great way for them to pad their own wallet maybe. Myself as well as the other regular posting brokers on this board always strongly advised against 10 year mortgages. Another example is a bank pushing you to take a HELOC with your mortgage whether you need it or not. This turns your mortgage into a collateral mortgage regardless of lender making it harder for you to leave they bank. CIBC in particular loves to push their clients into cash back mortgages., which is highly profitable for them since their cash back mortgage is the harshest to break of all lenders including other banks.

A truly good broker will be happy I have your business and willl help you to choose the procduct that is right for you without much thought on comp. . Like I said before, there are good and bad on each side.
Deal Addict
Sep 13, 2011
2865 posts
812 upvotes
Toronto
Liberator wrote:
Feb 15th, 2016 12:58 pm
Well said Paul

This has been my experience thus far. I spoke with a few banks and then asked a broker specifically for a few standard charge fixed term mortgages on investment properties. after providing all my financials, assets, liabilities and income details, I was offered rates that were comparable to bank rates that was offered to me by my own bank. It was just another bank with bank rates, penalties etc!

Even bank field Mortgage Specialists are commission driven too ie. No lending, no compensation so they are keen to lock you down. The lower the rate, the less commission from my understanding too

I was told because we have several properties, I had limited options as most lenders just want principle residence mortgages. I was pushed to Get a collateral mortgage Heloc with fixed term component and revolving portion with a bank to access max equity on our properties even though I didn't need nor want it.

What lenders offer investment property mortgages?

How many doors will they allow owners to have?

What is a good secured Heloc rate now pls? Is prime plus 0.25 still available?
It's true that there are some lenders that won't lend on rental properties at all. Some of rate premiums for rentals and most of the lower rate products are offered on principal residence only. Some of the better lenders for rentals would be Street Capital, First National (some products) and Alterna Savings. Most lenders will allow you to have a total of only 4 - 5 properties in your portfolio, including your primary residence. National Bank is the only one I know of that goes by 'doors' and I believe their maximum is 16 doors.
Paul Meredith
Mortgage Broker
CityCan Financial Corp (lic. 10532)
Newbie
Sep 2, 2007
79 posts
22 upvotes
Paul

What kind of investment property rates does National offer via brokers channels for fixed term please?

What rates are available via TD and Scotia and other banks pls?

What provinces Are you licensed for pls?
PaulMeredith wrote:
Feb 15th, 2016 7:43 pm
It's true that there are some lenders that won't lend on rental properties at all. Some of rate premiums for rentals and most of the lower rate products are offered on principal residence only. Some of the better lenders for rentals would be Street Capital, First National (some products) and Alterna Savings. Most lenders will allow you to have a total of only 4 - 5 properties in your portfolio, including your primary residence. National Bank is the only one I know of that goes by 'doors' and I believe their maximum is 16 doors.
Newbie
Sep 2, 2007
79 posts
22 upvotes
The Globe and Mail:

Regulator says B.C. mortgage brokers should disclose commissions -

http://www.theglobeandmail.com/report-o ... 1/?service
B.C.’s financial services regulator is proposing that mortgage brokers in the province disclose their commissions, a move the agency says is necessary to protect consumers but that brokers across the country argue will undermine confidence in their industry.

The province’s Financial Institutions Commission issued an open letter on its website last month detailing a plan that would require mortgage brokers to tell clients how much money they stand to make on a deal.

Mortgage brokers are provincially regulated, meaning the proposal would only apply to those in B.C. But the industry is closely watching the issue given the likelihood that other provincial regulators will follow suit.

The Financial Services Commission of Ontario said in an e-mailed statement that it was aware of the discussion in B.C. and “takes an interest in developments of the mortgage-broker industry across Canada, especially when those developments involve consumer protection.”

Unlike independent financial advisers or real estate agents, mortgage brokers don’t typically charge their clients fees, instead collecting a commission from banks and mortgage lenders. While brokers aren’t usually tied to a specific financial institution, in practice many work with only a handful of lenders who reward their loyalty with bonuses based on the volume of business they generate.

Under the current rules, brokers must disclose to clients that they are being paid by a lender, but aren’t required to reveal exactly how much they make on a deal.

The regulator says it’s concerned that brokers might be tempted to steer clients toward lenders who pay the highest commissions and bonuses, rather than into the most suitable mortgage or the one with the lowest interest rate.

“Our concern is firstly that there is a lack of transparency in the way that brokers are compensated and that consumers don’t have any information about the potentially powerful influences on a broker’s advice to them,” the commission’s deputy superintendent Chris Carter said.

Brokers argue that disclosing commissions would only confuse their customers, making them think they’re being charged extra or paying higher mortgage rates than they would at a bank. They fear that being forced to show how much they get paid will drive consumers toward the major banks, where mortgage salespeople also often work on commission, but aren’t required to disclose their compensation to customers.

“It could end up hurting the brokerage industry because of the perception that you’re paying more when you’re dealing with a broker,” Kelowna mortgage broker Laurie Baird said. “It puts us at an unfair disadvantage against the reps from the banks.”

Commissions are fairly standard across the industry, ranging from roughly 80 to 110 basis points on a typical mortgage (there are 100 basis points in a percentage point.) That equates to $4,000 to $5,500 on a $500,000 mortgage.

But brokers say disclosing an accurate dollar figure for every client will be difficult as many don’t know exactly what their commissions will be at the time, since they might end up qualifying for a volume bonus later in the year once they’ve done enough deals with a lender.

“It’s really complicated because how are you going to be able to disclose the exact amount if six months from now maybe your volume went up and you’re going to get a little bit of a bonus?” asked Donna Telep, a mortgage adviser in Maple Ridge, B.C., east of Vancouver. “As long as the individual client isn’t paying the fee, then I don’t see the purpose.”

At least two trade groups representing brokers have sent written concerns to the Financial Institutions Commission. Brokers are also being encouraged to write their MLAs over the issue.

The issue hits at the core of a larger battle facing the fiercely competitive mortgage broker industry, in which some mortgage brokers sacrifice a portion of their commissions in order to offer the lowest possible interest rates, a practice known as “buying down” the rate.

Such brokers typically make up for the lower commissions through doing a higher volume of deals, sometimes into the hundreds of millions of dollars.

They have drawn the ire of many traditional brokers who argue that revealing their commissions will push clients toward discount brokers offering the lowest fees and rates, but whose mortgages may also come with costly restrictions, such as prepayment penalties for those who need to break a mortgage early.

“They are the Wal-Mart of the mortgage industry,” said Walid Hammami, a mortgage broker in Montreal. “They are racing to the bottom.”

Many brokers are mainly afraid of consumers finding out how much they get paid, says Ron Butler, who operates a large online discount brokerage and is one of the few who supports the idea of disclosing commissions to clients.

“It’s really simple. I operate on one-third the income of the average mortgage broker, so I don’t mind it being showed to people,” he said. “I think it will have next to no effect [on the industry], which gives you some good insight into the level of terror that many mortgage brokers feel about revealing their income to their clients.”
Deal Addict
Sep 13, 2011
2865 posts
812 upvotes
Toronto
Liberator wrote:
Feb 16th, 2016 1:57 am
Paul

What kind of investment property rates does National offer via brokers channels for fixed term please?

What rates are available via TD and Scotia and other banks pls?

What provinces Are you licensed for pls?
NBC and Scotia are both at 2.89% on a 5 year fixed. TD is at 2.84%. TD and NBC both register all their mortgages as collateral. Now compare this with a lender like Alterna Savings who can do 2.49% on a rental. On a $300,000 mortgage, the difference in cost between 2.84 and 2.49% works out to $5,138.19 over 5 years. Doesn't make any sense to spend this extra money to go with a big bank as you're going to get very little benefit in return. For an investment property, it makes even less sense.

I'm primarily limited to dealing in Ontario.
Paul Meredith
Mortgage Broker
CityCan Financial Corp (lic. 10532)
Penalty Box
Feb 2, 2014
3097 posts
469 upvotes
Toronto
taal wrote:
Feb 14th, 2016 3:01 pm
A lot of the better mortgage rates seem to state no pre-approval, does that imply you need a specific deal i.e exact amounts / an offer to purchase before being able to confirm the rate? What do folks typically do, get a pre-approval at a bank to get a rough amount and have an option, then after putting an offer go and try to get the better rates?
Correct, a lot of the promos are for approval, not pre-approvals. This means, in the case of a purchase, you have a contract to purchase a property.

The whole point of getting pre-approved is to know that you can get financing to buy a house. Real estate agents, sellers and yourself don't want to spend time shopping for a property just to find out it's not possible to purchase due to financing.

Either a broker or a bank can pre-approve....you just won't get competitive rates.
Kevin Somnauth, CFA
Mortgage Agent and Real Estate Sales Representative
Newbie
Aug 23, 2009
15 posts
Ontario
CdnRealEstateGuy wrote:
Feb 16th, 2016 11:07 am
Correct, a lot of the promos are for approval, not pre-approvals. This means, in the case of a purchase, you have a contract to purchase a property.

The whole point of getting pre-approved is to know that you can get financing to buy a house. Real estate agents, sellers and yourself don't want to spend time shopping for a property just to find out it's not possible to purchase due to financing.

Either a broker or a bank can pre-approve....you just won't get competitive rates.

I've wondered this, higher rates for longer guaranteed period IE 120 days I assume versus 90 days. Say you get a 120 approval, then when it comes down to buying a house, what stops the buyer from saying hey the rate today is 2.44, why isn't this an option? Is there some sort of penalty if initially your told 2.89% on 120 days but now that your ready to buy and complete the sale today's best rate is 2.44%?

thanks
Deal Addict
Sep 13, 2011
2865 posts
812 upvotes
Toronto
rockcanada wrote:
Feb 16th, 2016 12:50 pm
I've wondered this, higher rates for longer guaranteed period IE 120 days I assume versus 90 days. Say you get a 120 approval, then when it comes down to buying a house, what stops the buyer from saying hey the rate today is 2.44, why isn't this an option? Is there some sort of penalty if initially your told 2.89% on 120 days but now that your ready to buy and complete the sale today's best rate is 2.44%?

thanks
Not quite. The rate hold for pre approval is 120 days. There is no such thing as a pre approval for anything shorter than that. There is nothing that prevents a buyer to shopping around for a lower rate. The preapproved rate is just in case it it looks like rates are going to be increasing to protect you from the increase. Right now, rates are stable.

The only time this would be an issue is if the lower rate was special from the same lender. Say for example you submitted a pre approval to a lender for 2.79%. Let's say that same lender has a 60 day quick close special for 2.44%. You would not be able qualify for this rate with that lender since the original application was submitted to them prior to the 60 days. With a different lender, everything remains open to you however.
Paul Meredith
Mortgage Broker
CityCan Financial Corp (lic. 10532)
Deal Addict
Nov 14, 2005
1188 posts
149 upvotes
Toronto
Liberator wrote:
Feb 16th, 2016 7:03 am
The Globe and Mail:

Regulator says B.C. mortgage brokers should disclose commissions - ....................................................................................................

Many brokers are mainly afraid of consumers finding out how much they get paid, says Ron Butler, who operates a large online discount brokerage and is one of the few who supports the idea of disclosing commissions to clients.

“It’s really simple. I operate on one-third the income of the average mortgage broker, so I don’t mind it being showed to people,” he said. “I think it will have next to no effect [on the industry], which gives you some good insight into the level of terror that many mortgage brokers feel about revealing their income to their clients.”
Most of the broker on this site would be in the same shoes are Ron Butler, we make a lot less by offering lower rates on RFD and reducing our commissions.
_______________
Shawn Stillman, CA, CPA Mortgage Broker
Mortgage Outlet Inc. 12628 (FSCO - Ontario), X300374 (FICOM - BC), MW-1411078 (RECA - Alberta)
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