Real Estate

The Official Mortgage Rates Thread

  • Last Updated:
  • Jul 27th, 2017 4:37 pm
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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.
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EugW wrote:
May 18th, 2017 1:00 pm
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
Thanks.

RBC offered 2.19% on a 2 year fixed and 2.15% for a 5 year variable. This is a renewal...not sure if I'm going to shop around to change banks as it is a collateral mortgage and will cost me to change banks. This is for a rental.
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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?
Portability refers to your ability to take your mortgage with you when you move houses. Since you're mortgage isn't portable, yes you would have to discharge the mortgage and pay the penalty if you were to move. If the mortgage is assumable, the person buying your house may assume the mortgage, and you wouldn't have to pay the penalty.

This is strange of Scotiabank to not allow you the portability option. In the broker channel, the Flex Value Variable Rate Mortgage is portable, I just read the standard charge terms to be sure. The pre-payment options are also not great. They will usually offer a 20/20.

Ask them why it's not portable, and ask them for 20/20.

Regards,

Connor
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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?
Piggybacking off of Paul here - Both the mortgage balance and the heloc balance will be paid out and consolidated into one conventional mortgage.
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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 $2.5K cashback + appraisal reimbursement Is this reasonable or can anybody here help us get a better rate? Thank you
You can do much better. 2.49% and 2600$ cash back.
Mortgage Specialist in the GTA here to answer all your questions.
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GreenMortgages wrote:
May 18th, 2017 3:40 pm
Piggybacking off of Paul here - Both the mortgage balance and the heloc balance will be paid out and consolidated into one conventional mortgage.
PaulMeredith wrote:
May 18th, 2017 2:48 pm
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.
Ah ok. So if you're going to maintain a HELOC balance, it'll be a collateral charge product anyway in the new bank? Only if you take the entire balance and refinance the total are you free of the collateral type product? And then perhaps get a basic LOC instead, but it would be at a higher rate...
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onlineharvest wrote:
May 18th, 2017 3:52 pm
Ah ok. So if you're going to maintain a HELOC balance, it'll be a collateral charge product anyway in the new bank? Only if you take the entire balance and refinance the total are you free of the collateral type product? And then perhaps get a basic LOC instead, but it would be at a higher rate...
Right, any heloc is collateral, if you were to switch to a lender and maintain a heloc, it would be a collateral charge. If you consolidate into a conventional mortgage you can be free of the collateral charge. That being said, not ONLY helocs are collateral. TD and National Bank only offer collateral mortgage for example, even a standard mortgage with no heloc component.
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GreenMortgages wrote:
May 18th, 2017 3:56 pm
Right, any heloc is collateral, if you were to switch to a lender and maintain a heloc, it would be a collateral charge. If you consolidate into a conventional mortgage you can be free of the collateral charge. That being said, not ONLY helocs are collateral. TD and National Bank only offer collateral mortgage for example, even a standard mortgage with no heloc component.
Right, I should have said with the exception of banks that have a collateral charge for ALL mortgages, like TD.
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I've been pre-approved for the mortgage I need at HSBC.
We're paying 20% down and home is over 1m.
They have 2.39 5 year fixed and 2.19 5 year variable. I'm leaning towards variable since it's been coming out ahead of fixed, we can switch over to fixed anytime without breaking any penalty and I think rates aren't going up due to Canada's weak economy. If NAFTA gets broken and we lose our exports, it'll get worse.
Anyway, I feel the 0.2 spread isn't much and I should be able to get a better variable.
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onlineharvest wrote:
May 18th, 2017 4:06 pm
Right, I should have said with the exception of banks that have a collateral charge for ALL mortgages, like TD.
Exactly! Good luck with your financing.
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stryder1587 wrote:
May 18th, 2017 4:08 pm
I've been pre-approved for the mortgage I need at HSBC.
We're paying 20% down and home is over 1m.
They have 2.39 5 year fixed and 2.19 5 year variable. I'm leaning towards variable since it's been coming out ahead of fixed, we can switch over to fixed anytime without breaking any penalty and I think rates aren't going up due to Canada's weak economy. If NAFTA gets broken and we lose our exports, it'll get worse.
Anyway, I feel the 0.2 spread isn't much and I should be able to get a better variable.
Hi there,

You can definitely get a cheaper variable rate than 2.19%. At least 2.10%, and likely cheaper.

Regards,

Connor
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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.
Much better rates out there Rex. In addition, the lower rates won't be a collateral charge.
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stryder1587 wrote:
May 18th, 2017 4:08 pm
I've been pre-approved for the mortgage I need at HSBC.
We're paying 20% down and home is over 1m.
They have 2.39 5 year fixed and 2.19 5 year variable. I'm leaning towards variable since it's been coming out ahead of fixed, we can switch over to fixed anytime without breaking any penalty and I think rates aren't going up due to Canada's weak economy. If NAFTA gets broken and we lose our exports, it'll get worse.
Anyway, I feel the 0.2 spread isn't much and I should be able to get a better variable.
Since the house is worth over 1 million you can get better rates and options. Variable as low as 2.1% and cash back depending on your closing date and size of your mortgage.
Mortgage Specialist in the GTA here to answer all your questions.
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Geese_Howard wrote:
May 18th, 2017 8:11 pm
Since the house is worth over 1 million you can get better rates and options. Variable as low as 2.1% and cash back depending on your closing date and size of your mortgage.
Why would the house being over 1m give access to better rates and options?
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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?
One must be careful when the word "conventional" comes up, as this may mean something different. See the text below for more details.

Just want to add a bit of information on the subject of "collateral" and "charge", as those words often come up here and there is endless confusion regarding those terms.

First we need to understand what "mortgage" and "charge" are, and that they are 2 completely different things. A mortgage is just a loan, similar to a car loan or any personal loan. You ask a lender for X amount of money, and sign a document attesting you will pay it back. In order to offer low rates on mortgage loans, lenders need to have that loan secured by a collateral, so that in the event the loan is not paid back, the lender has rights registered against the property. To register their interest on the property, the lenders use what is called a "charge", which is just like any other lien. The key difference here is that when the lender asks the lawyer to register that lien, they can use one of these 2 types of charge : a "standard mortgage charge" or a "collateral charge".
Why are they different? Because with a regular standard charge, the lender registers the lien in the exact same amount as the mortgage loan. So, if you buy a $500k property and have 200k downpayment, the mortgage amount will be 300k, and the lender will register a 300k lien (the charge) against it, to "secure" that loan. If you need to borrow more money later on, as years go by and the property value increases, the lender cannot simply release more money to you. They must remove that "charge", or as we often say - it must be "discharged", and register a new lien. Using the numbers above, if the property is now worth 600k and the client wants to get 100k back and refinance that mortgage, the lender would have to discharge that mortgage and register a new one, with a higher amount (matching the new amount required). As the market evolved, more products were created to suit different needs of clients in different situations, so some lenders started offering mortgages that would now be secured by a "collateral charge" (instead of a standard mortgage charge), simply because a collateral charge allows the lender to register X amount against the property and the amount could be higher than the mortgage amount being disbursed. In the example I used above, the lender could ask the lawyer to register a collateral charge against the property in the amount of $500k, even though they were only releasing to the client 300k. The potential advantage to the client is that if he needs 100k later on, the current charge registered ALREADY covers up to 500k, so they can adjust the loan without the need to remove the charge and register a new one.
Now the potential downside of a collateral charge - it cannot be moved from lender A to lender B without the assistance of a lawyer or a title company. What this means is that at the end of your term, should you decide to change lenders because you see a better offer with a different lender, even if you have no intention of cashing out any equity, this transfer from lender A to B would be treated as a refinance, and you would be required to pay a lawyer or a title company some fees, around $1000.00 or so. If you only had a simple standard mortgage charge, you could move from A to B without any legal fees, as standard mortgage charges can be transferred without legal services required.
The thing to remember is that a collateral charge will give you some flexibility ONLY if you need to borrow more against the property value, down the road. A standard mortgage charge would not give you that flexibility without extra costs, however if you dont need to borrow more against the equity, it saves you money as you have more freedom to change lenders without legal fees.

About the word "conventional" - It only means a mortgage scenario where the client has 20% downpayment (if purchasing) or 20% equity (in transfers or refinances). Because the lenders do not need to buy mortgage insurance, this loan is called "conventional". In situations where the down payment/equity is less than 20%, you are required to have the loan insured by CMHC/Genworth, and this loan is NOT called "conventional" - this is what we call a "high ratio" or "insured" mortgage. It still has NOTHING to do with the type of charge, as the charge is simply the lien that will be registered against the property, not the type of loan.

Lenders such as TD bank and NBC use only collateral charges. So, the scenarios below are possible :

A - Client is buying a 500k property with 5% down payment - this is not a "conventional" mortgage because it needs to be insured. This will be a "high ratio" or "insured" mortgage, but TD will tell the lawyer to register a collateral charge to secure the loan. As a result, you will have an insured (or high ratio) mortgage attached to a collateral charge.
B - Client is buying a 500k property with 30% down payment - this does not require insurance, so it will be a "conventional" mortgage, and TD will tell the lawyer to register a collateral charge to secure the loan, just like the scenario above. As a result, you will have a conventional mortgage attached to a collateral charge.

If the lender is First National, Industrial Alliance, Mcap, ICICI Bank, Paradigm, and pretty much all other lenders on the broker channel :

A - Client is buying a 500k property with 5% down payment - this is not a "conventional" mortgage because it needs to be insured. This will be a "high ratio" or "insured" mortgage, but these lenders will tell the lawyer to register a standard mortgage charge to secure the loan. As a result, you will have an insured mortgage attached to a standard mortgage charge.
B - A - Client is buying a 500k property with 30% down payment - this is a conventional loan, as it does not require insurance. This will be a "conventional" mortgage and these lenders will tell the lawyer to register a standard mortgage charge to secure the loan. As a result, you will have an conventional mortgage attached to a standard mortgage charge.
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