Real Estate

The Official Mortgage Rates Thread

  • Last Updated:
  • May 25th, 2018 6:29 pm
Deal Addict
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Toronto
user6249 wrote:
May 22nd, 2017 1:28 pm
First time buyer here, waiting to hear back on an offer closing July 22. If accepted, I will have five days to get a commitment letter from a lender. A couple questions:

1. Is this usually enough time to get an unconditional commitment letter? I've already been pre-approved for the amount of the purchase (although I understand the pre-approval probably doesn't make much of a difference).
2. How often/when is an appraisal required?
1.Yes.
2.If your mortgage is insured, an appraisal will likely not be needed. If it's not insured, appraisal will be required.
Kevin Somnauth, CFA
Mortgage Agent and Real Estate Sales Representative
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Mar 25, 2017
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PaulMeredith wrote:
May 21st, 2017 12:19 pm
Yes, the 5 year variable rate of 1.85% is still available and it is still the lowest rate available for your situation. In additional to MCAP, RMG offers this rate as well, however the penalty is 3% of the mortgage amount as opposed to the standard 3 months interest. The MCAP option is definitely the better of the two for the vast majority of situations.
I'm an extreme noobie, why do people go with fixed mortgage rate when they an go with cheaper 1.85% variable rate ? does the variable rate has any realistic chance of going up so mych that it can go passed the fixed rate ?
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Engineering2017 wrote:
May 22nd, 2017 11:10 pm
Hello

Another request from a "lurker": my 5-year term ends in July. It is with RBC, and unsure if it is collateral or not.
Balance is 275,000, and house is estimated at 1,150,000.
750 credit.
Toronto property.
I am curious about what are some my options away from RBC, variable or fixed rates.
Do you have a HELOC? If not, it's not collateral.
Kevin Somnauth, CFA
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Replyall wrote:
May 23rd, 2017 11:22 am
Looking for best 2 year fixed rate in Quebec with 60 day rate hold for new purchase. $270K with 20% down.
2.09% 2-year fixed is the best rate right now.
Kevin Somnauth, CFA
Mortgage Agent and Real Estate Sales Representative
Newbie
May 22, 2017
7 posts
CdnRealEstateGuy wrote:
May 23rd, 2017 12:17 pm
2.09% 2-year fixed is the best rate right now.
Thanks, is this Scotia? My broker is offering Scotia 2 year fixed for 2.19. Does that mean he's pocketing a 10BPS spread?

Scotia also directly offered me 2.09 last week. Is there any reason to stick with a broker in my case? I know brokers are generally more competitive on longer terms.
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May 1, 2017
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worldpositive wrote:
May 23rd, 2017 12:14 pm
I'm an extreme noobie, why do people go with fixed mortgage rate when they an go with cheaper 1.85% variable rate ? does the variable rate has any realistic chance of going up so mych that it can go passed the fixed rate ?
There's always more interest rate risk attached to the variable rate mortgage as opposed to fixed. Of course this depends on the spread between the rates. A 50 bp spread in variable vs fixed is only two hikes on the Canada overnight rate. If the full hike is passed on to the consumer your edge is gone. While it's generally unlikely in these market conditions that we'll see two quarter-point hikes in the near future, it can certainly happen. There has been talk of a hike in as early as June, though I don't see it happening.
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Connor Green
Mortgage Agent
Concierge Mortgage Group
#12179
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Mar 25, 2017
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GreenMortgages wrote:
May 23rd, 2017 12:36 pm
There's always more interest rate risk attached to the variable rate mortgage as opposed to fixed. Of course this depends on the spread between the rates. A 50 bp spread in variable vs fixed is only two hikes on the Canada overnight rate. If the full hike is passed on to the consumer your edge is gone. While it's generally unlikely in these market conditions that we'll see two quarter-point hikes in the near future, it can certainly happen. There has been talk of a hike in as early as June, though I don't see it happening.
Thanks, why are mortgage rates only going down in this hot market ? You would think they'd go up with demand ? Who controls mortgage rates ? What is the advantage( better politica support ?) of keeping mortgage rates low for the government ?
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May 1, 2017
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worldpositive wrote:
May 23rd, 2017 12:41 pm
Thanks, why are mortgage rates only going down in this hot market ? You would think they'd go up with demand ? Who controls mortgage rates ? What is the advantage( better politica support ?) of keeping mortgage rates low for the government ?
For fixed rates: Heavily dependant on the Canada 5 year bond Yield. Investors (people who fund mortgages, hedge funds, pension funds etc.) choose between different assets for investment. If the bond yield is at 0.856%, for example, an investor will want a certain spread higher than that to compensate for the added risk, maybe 1.8%, since bonds are safer than mortgage, so you might see fixed rates around 2.65% (0.865+1.8). So, when the bond rate goes up, fixed rate mortgage rates go up.

For variable rates: Based heavily on the Bank of Canada overnight lending rate. Fluctuations in this rate influences the prime rates at most lenders (currently 2.7% for the most part). If the BoC ONR moves, banks typically adjust the prime to reflect the change, which effects variable rate mortgages.

So, as you can see, no one really "controls" mortgage rates. They are representative of open market operations and rates on comparable investment (opportunity cost of forgone options).

Simply hiking the BOC overnight rate has a multitude of affects on industries outside of the mortgage market, so simply hiking this rate to control the mortgage rate market doesn't always make the most sense. I think, personally, that the government can't regulate away a hot housing market. I think normal economic activity will take place until some equilibrium is met.
Last edited by GreenMortgages on May 23rd, 2017 12:52 pm, edited 3 times in total.
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Connor Green
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Concierge Mortgage Group
#12179
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sundawner wrote:
May 22nd, 2017 8:09 pm
Just wanted some feedback.

Looking for a mortgage $700K-$800K.

20% downpayment.

Broker offered 5 year fixed @ 2.49% and 5 year variable @ 2.39%.

Rates seem high for me.

Any advice?
You can get lower and cash back depending on when the closing date is.
Mortgage Specialist in the GTA here to answer all your questions.
Newbie
May 22, 2017
27 posts
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So I am looking at a mortgage for around 650-700K with my wife. We would only be putting 5% down so it would be CMHC insured. I am thinking of going with the HSBC rate of 2.39%. I live in Victoria, BC. Can I get much better then that, or is that pretty solid?
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Feb 12, 2013
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If I received a mortgage approval letter from a lender and sign it, can I still shop around for a better rate or am I legally binded to the agreement?
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May 1, 2017
847 posts
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jesuisdanny wrote:
May 23rd, 2017 6:26 pm
If I received a mortgage approval letter from a lender and sign it, can I still shop around for a better rate or am I legally binded to the agreement?
Hi there,

You can shop the mortgage around as much as you like. There is nothing stopping you from obtaining financing elsewhere. A mortgage commitment is a commitment/approval from the lender showing their intention to proceed with your financing. Nothing legally binding.

Regards,

Connor
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Connor Green
Mortgage Agent
Concierge Mortgage Group
#12179
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May 1, 2017
847 posts
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rushin4life wrote:
May 23rd, 2017 4:53 pm
So I am looking at a mortgage for around 650-700K with my wife. We would only be putting 5% down so it would be CMHC insured. I am thinking of going with the HSBC rate of 2.39%. I live in Victoria, BC. Can I get much better then that, or is that pretty solid?
Hi,

2.34% is available elsewhere in a full featured product (pre-payments, portability, non-collateral, penalties, etc.) and as low 2.24% 5 year fixed is available in BC!

Cheers,

Connor
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Connor Green
Mortgage Agent
Concierge Mortgage Group
#12179
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Much better options out there.. you are leaving a lot of money on the table, especially considering that your situation (insured mortgage) gets the absolute lowest rates out there, way lower than HSBC and with better terms!

Your broker does not need to be in BC, as several brokerages can service all provinces, so a broker in Ontario can get you a great deal in BC. I close deals in BC all the time (in fact closed one last week).
rushin4life wrote:
May 23rd, 2017 4:53 pm
So I am looking at a mortgage for around 650-700K with my wife. We would only be putting 5% down so it would be CMHC insured. I am thinking of going with the HSBC rate of 2.39%. I live in Victoria, BC. Can I get much better then that, or is that pretty solid?
Andre Oliveira - Mortgage Agent
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The Bank of Canada announced this morning that they will be maintaining their overnight rate one again, which is the rate prime is based on. The announcement came at 10am this morning. May 25th). This is exactly what was expected and anything else would have been a pretty big surprise. 

For now, the prime rate remains 2.70%. 

We have also seen discounts on variable rate mortgages increase (meaning lower rates) making variable rates an attractive option once again.  There are now variable rates as low as prime -0.95% on high ratio mortgages (less than 20% down payment).

This morning's announcement relates to prime rate, however prime rate and fixed mortgage rates are unrelated. While variable rate mortgages and lines of credit are affected by prime rate, fixed mortgage rates are determined by bond yields.  As they have been dropping lately, there have been some recent drops to fixed rates. The 3 year fixed is now as low as 2.15% (high ratio purchases or those with 30% or greater down payment / equity. Property value must be under $1 million).  

You can follow the bond yields here: https://www.investing.com/rates-bonds/c ... bond-yield

You can read the full announcement here: http://www.bankofcanada.ca/2017/05/fad- ... 017-05-24/

The next interest rate announcement will be on July 12th, 2017.
Paul Meredith
Mortgage Broker
CityCan Financial Corp (lic. 10532)

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