Good to know. I know a few lenders recall the cash back if they break mid term.
Concierge Mortgage Group
May 19th, 2017 1:57 pm
May 19th, 2017 2:10 pm
thanks for the advise, we are getting a 2M mortgage so dont have any cash to pre-payment,.....
May 19th, 2017 2:21 pm
The prepayment options he was referring to are options to pre-pay portions of your mortgage (often up to 20% of the original balance per year) in lump sums, penalty free during the term. So, if you ever get a large inflow of cash, and don't want to invest it, you can put it towards your mortgage. The benefit of doing this is that your mortgage balance is instantly reduced, meaning you'll pay less interest long term. Typically you can increase your mortgage payment by 20% as an alternative to lump sum payments.
May 19th, 2017 4:13 pm
May 19th, 2017 10:39 pm
Considering you have a collateral mortgage, options will be quite limited for you. I would say unlikely you will find a lower rate than the 2.20%, and if you do, it's unlikely your fees would be covered for you (around $1,300 approximately).willemk wrote: ↑May 19th, 2017 4:13 pmI have a renewal coming up at the end of August.
I currently have ~200K left in my Scotiabank STEP collateral mortgage on a place worth approx 500K.
I don't use the HELOC part of the mortgage, so I'm open to switching to a conventional mortgage.
Looking around, 2.2 is the lowest variable rate I seem to be able to find. Is that a decent offer?
Is there an advantage to waiting until closer to the renewal date?
May 20th, 2017 12:40 am
May 20th, 2017 1:26 am
Hi there,GreenMortgages wrote: ↑May 16th, 2017 10:09 amHi there,
That's an extremely competitive rate for a renewal, especially since your mortgage is collateral. You're unlikely to find a better deal as collateral switches are treated as refinances, which means your mortgage would have to be fully discharged, and re registered, which means you would incur solicitor fees.
The downside with staying with TD is that, because of the collateral charge, you can't truly compete with the best available rates at renewal because your mortgage is not eligible for typical switch products. This acts as a retention tool for TD. The idea behind getting out of a collateral as soon as possible is to give you more leverage to compete for subsequent renewals/maturities. There are lenders who cover the majority of the costs to switch out of a collateral mortgage, but their rates are not as competitive as what you've been offered (since it would be a refinance rate, not a switch rate).
Good luck with your renewal. The 2.39% is a great rate, be sure to ask about pre payment options.
May 20th, 2017 1:28 am
May 20th, 2017 2:34 am
May 20th, 2017 3:17 am
May 20th, 2017 6:18 am
May 20th, 2017 7:13 am
May 20th, 2017 10:59 am
I personally love variable rate mortgages. They tend to outperform comparable fixed rate terms and save the clients a ton of money. Too bad most people only think "risk", instead of considering the "reward" of a variable rate mortgage. When I talk to clients, 9 out of 10 somehow believe that rates are just about to start increasing (and that they are lucky to be able and lock a fixed rate right now) but they never ask themselves "why is the bank willing to lock a low rate for 5y when we all know the rates are just about to explode?"...
May 20th, 2017 4:35 pm
May 20th, 2017 5:05 pm
Just wait about 45 days closer to your renewal date. You can get 2.40 or 2.50% on a 5 year fixed and have all fees covered.