Real Estate

The Official Mortgage Rates Thread

  • Last Updated:
  • Oct 18th, 2017 1:06 am
Newbie
May 15, 2017
2 posts
We are shopping for a mortgage, bought house for $1.12, closing end of june. 20% down
So far, the best offer was via Scotiabank (broker channel
2.59% 5 year fixed, 30 year amortization, 20/20 prepayments, with $2.5K cashback + appraisal reimbursement Is this reasonable or can anybody here help us get a better rate? Thank you
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May 1, 2017
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rex911 wrote:
May 18th, 2017 12:04 am
looking to finance a new purchase with 5-yr fixed, 20% down.

TD approved me at 2.41, both RBC and CIBC at 2.59. Ratehub has been nagging me about 2.24 for a while.

Wondering if I can do better or should I just go with TD? Thanks.
Hi,

The TD mortgage would be a collateral charge, meaning that it will not be cheap to switch to a new lender after your 5 year term is up. If you want to switch to take advantage of lower rates at maturity, you mortgage has to be fully discharged and re registered, requiring legal fees, appraisal, discharge fee. There are some lenders who would cover these fees, but you would be limited to their rates and terms at that time. So, keep that in mind when considering TD.

Depending on the specifics of the property, the closing date, and the required mortgage amount, there are better 5 year, non collateral rates available with 20% down through several lenders!

Connor
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Connor Green
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PaulMeredith wrote:
May 17th, 2017 8:58 am
In your particular case, since you refinanced, you would no longer qualify for a high ratio switch unfortunately since you no longer have the original mortgage from when you purchased the home. Sorry.
How can they do that? Shouldn't the original insurance be for $X of mortgage for 25 years?

If you refinance and added only $10,000 they would make you pay CMHC premium on the full new mortgage amount instead of an adjustment factor based on the difference?! Crazy.
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Mar 28, 2013
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Hi I need some advise please. I have 20 months remaining on my existing mortgage at 3.39% and the bank is willing to do a blend with new rates and I can renew a 5 year term for 2.68%. I prefer to go shorter term but the shorter the term the higher the rate for the blend.. If I were to terminate there is a 10k penalty and then I can go into a 5 year 2.39% at another bank. What should I do to save the most money potentially?

Thanks.
Member
May 1, 2017
466 posts
109 upvotes
AnnonNim17 wrote:
May 18th, 2017 12:57 am
We are shopping for a mortgage, bought house for $1.12, closing end of june. 20% down
So far, the best offer was via Scotiabank (broker channel
2.59% 5 year fixed, 30 year amortization, 20/20 prepayments, with $2.5K cashback + appraisal reimbursement Is this reasonable or can anybody here help us get a better rate? Thank you
You've been offered a pretty good rate with Scotiabank. Since your purchase price is 1.12m, your mortgage is considered uninsurable, which eliminates many of your options for best possible rates. Considering the cash-back, and appraisal paid, the 2.59% is fairly strong.

That said, there is better around in terms of rate, but you've got a decent full offer.

Regards,

Connor
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Connor Green
Mortgage Agent
Concierge Mortgage Group
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Sep 13, 2011
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rex911 wrote:
May 18th, 2017 12:04 am
looking to finance a new purchase with 5-yr fixed, 20% down.

TD approved me at 2.41, both RBC and CIBC at 2.59. Ratehub has been nagging me about 2.24 for a while.

Wondering if I can do better or should I just go with TD? Thanks.
Rates can vary significantly depending on down payment / equity, property value, and transaction type. Lowest rates are found on purchases for under $1 million with LESS than 20% down payment, therefore CMHC insured. The 2.24% 5 year fixed rate would have to fall into this category for it to be applicable. Rates for purchases under $1 million with 20% or greater down payment can fall as low as 2.34%.

Rate is just one component of the cost of your mortgage. It's possible that the mortgage with the lower rate could end up costing you thousands more. The T & C can be even more important than the rate itself as there are certain clauses some mortgages have that can end up costing you dearly down the road. They two main ones are collateral charges and penalty calculation.

TD registers ALL their new mortgages as collateral charges, which means that the mortgage must be refinanced at the end of the term as opposed to doing a straight switch (if switching lenders). When refinancing, there are legal, appraisal, and discharge fees, which typically amount to around $1,200 to $1,400. As mentioned, these fees can sometimes be covered by the lender, however in many situations, you'll also end up paying a higher rate. That higher rate in some cases can be as much as 0.30% higher... or even greater than that. So having a collateral mortgage can end up costing you thousands of dollars unnecessarily. The bank knows this, and they know it will cost you dearly to leave them at the end of their term, which doesn't give you very much negotiating power.

The three lenders that register ALL their mortgages as collateral charges are TD, National Bank, and Tangerine. Here are a couple of videos from CBC Marketplace on collateral mortgages:




The next thing you need to consider is penalty calculation. All the big banks have significantly harsher penalty calculations than most non-bank lenders. I've seen them as much as 4 times higher. This is why big banks are typically not the best choice for fixed rate mortgages. Here are some articles you can read on penalties through big banks:

http://www.theglobeandmail.com/…/the-hi ... e15774375/
http://www.cbc.ca/…/customer-fee-to-pay ... age-double
http://canadamortgagenews.ca/…/mortgage ... s-exposed-…/
http://www.cbc.ca/…/td-bank-client-deva ... 17-000-mor
http://www.canadianmortgagetrends.com/… ... ion-lawsui

There really isn't a lot of benefit to going with a big bank other than being able to view all your accounts on one page and recognizing the logo on your mortgage statement. Believe it or not, i've seen people pay over $10,000 more in interest over their term solely for this privilege. Is it any wonder why the big banks have the largest buildings in any city.
Paul Meredith
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Bond yields have dipped to their lowest levels since mid-November following a significant drop yesterday. As fixed mortgage rates are determined by bond yields, this puts downward pressure on rates. As a result the lowest 5 year fixed has dropped to 2.34% for purchases with 20% or greater down payment.

5 year fixed rate for purchases with LESS than 20% down payment remains unchanged at 2.24%, however we very well may see this drop also.

You can follow the bond yields yourself here: https://www.investing.com/rates-bonds/c ... bond-yield Note that bond yields influence movement of fixed rates only and do not affect variable rates.
Paul Meredith
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CityCan Financial Corp (lic. 10532)
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Mar 23, 2009
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Are the banks often matching the subsidized broker rates these days? Sorry, I figure this has probably been answered before, but it's not listed in a thread summary or on the first page of this giant thread, almost 2500 pages long.

For example, I see on ratehub.ca the 1, 2, and 3 year rates are 1.99%. On The Star's table, the corresponding rates are 2.84%, 2.14%, and 2.36%. I assume the lowest ratehub rates are all broker subsidized.

I will be trying to renew my CIBC mortgage in June, since my mortgage term ends in December. I've been told that CIBC will often renew as early as 6 months in advance. I am currently on a 5-year fixed at 2.89%, so it'd be OK to be able to get a 2.14% 2-year or a 2.36% 3-year (or even a 2.39% 5-year which isn't actually necessary for me), but it would be even better to be able to get one at a lower rate, esp. something like a 1.99% 3-year. Amount owing at the end of June 2017 would be about $120000.

The only issue is at the current payment schedule, my amortization period is only 3 more years. However, I'd much prefer a much longer amortization period, with generous pre-payment options so I can have more flexibility. Still, having a new mortgage with say a 15-year amortization would not work since the payments would be too low and the pre-payment options would likely not be enough to compensate. I also do understand that some lenders may not be happy providing a low rate for a 5-year amortization, but I do know (from Paul Meredith in this thread) that a 5-year minimum amortization period is accepted by some lenders. Furthermore, my main goal here is to renew with my existing lender at a decent rate, not to switch lenders. I just want to go into the negotiation with CIBC with reasonable numbers and a reasonable expectation, as I'm guessing that going in with a request of 1.99% for a 3-year, esp. in my situation, may not get me very far.

EDIT:

I just called CIBC and it seems I am mistaken. The early renewal is not at 6 months. It's 5 months, or more accurately, 150 days. So that means I can't renew until end of July. Still, the question stands.

BTW, I reconfirmed this is a conventional mortgage. No discharge fee if I move the mortgage in December at the end of the term, so that adds a little leverage for me. I also have a HELOC (fixed amount, not re-advanceable), but I will have it paid down to $0 before I negotiate the new mortgage term.
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hello99 wrote:
May 18th, 2017 12:49 pm
Who is giving you 2.14% for 2 years? Is it an advertised rate?
It's advertised, but it's Home Trust. Hahah. :)

http://www.hometrust.ca/mortgagerates.aspx

However, for the 2.36% 3-year rate it's TD, and advertised.

https://www.tdcanadatrust.com/products- ... -rates.jsp

And for the 2.39% 5-year rate it's HSBC, and also advertised.

https://www.hsbc.ca/1/2/personal/borrow ... age-offers
Jr. Member
Dec 14, 2011
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OTTAWA
Scotiabank offered me a 2.21% 5 year variable rate on an uninsured mortgage worth about 300k for my renewal. 30 year amortization, 10/10 prepayment, standard charge (no STEP/collateral)... However the mortgage is not "portable". What does that mean? I can't move it to another lender without paying a penalty?
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Paul, if you have a collateral mortgage and a HELOC balance, what is involved with transferring to another bank but as a conventional instead?
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Emilio06 wrote:
May 18th, 2017 1:59 pm
Scotiabank offered me a 2.21% 5 year variable rate on an uninsured mortgage worth about 300k for my renewal. 30 year amortization, 10/10 prepayment, standard charge (no STEP/collateral)... However the mortgage is not "portable". What does that mean? I can't move it to another lender without paying a penalty?
Portable mortgage means you can move to a different property and take your mortgage with you.

BTW, would they match a 2.39% 5-year fixed? It's up to you of course, but some might prefer that over a 2.21% 5-year variable.
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EugW wrote:
May 18th, 2017 2:07 pm
Portable mortgage means you can move to a different property and take your mortgage with you.

BTW, would they match a 2.39% 5-year fixed? It's up to you of course, but some might prefer that over a 2.21% 5-year variable.
No, but they offered a 2.35% 3 year fixed, same terms. The penalty fees on fixed rate mortgages really make me uncomfortable though.

So with a non-portable mortgage, if we ever sell and buy a new house, I'm stuck paying the penalty regardless if I stay with Scotiabank or go to another lender?
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onlineharvest wrote:
May 18th, 2017 2:00 pm
Paul, if you have a collateral mortgage and a HELOC balance, what is involved with transferring to another bank but as a conventional instead?
Anytime you have a collateral mortgage, it would proceed as a refinance, meaning you would pay the usually higher refinance rates, plus legal, discharge and appraisal fees. Sometimes, these fees can be covered for you. If it's already a collateral charge, then it doesn't matter if there is a HELOC attached to it or not as it's the same process.
Paul Meredith
Mortgage Broker
CityCan Financial Corp (lic. 10532)
Deal Addict
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Emilio06 wrote:
May 18th, 2017 2:38 pm
No, but they offered a 2.35% 3 year fixed, same terms. The penalty fees on fixed rate mortgages really make me uncomfortable though.

So with a non-portable mortgage, if we ever sell and buy a new house, I'm stuck paying the penalty regardless if I stay with Scotiabank or go to another lender?
Kind of odd that it wouldn't be portable. Also 10/10 prepayment is also unusual for Scotia. Scotia is a little different when porting as they don't do blended rates and would just add another component to your mortgage when you purchase a new home mid-term. Perhaps either you, or the person at Scotia misunderstood something, as the mortgage should still be portable.

Providing the value of your property is under $1 million, there are lower variable rates out there with much better prepayment privileges and no 'odd' portability restrictions.
Paul Meredith
Mortgage Broker
CityCan Financial Corp (lic. 10532)

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