Forget Ratehub. They don't display the best rates as they advertise, they simply only display rates of the brokers that pay them $$$.fasbo2017 wrote: ↑Aug 4th, 2017 6:53 pmHi all,
Have an accepted offer for a house here in BC for $934k with completion Sept 29. Looking at sites like ratespy and ratehub, it appears there is a significant difference in rates on offer depending on whether the downpayment is greater/less than 20%. Trying to figure out if the rate savings is sufficient to cover the CMHC insurance premium+interest over the life of the mortgage.
Could anyone steer me to some calculations or an online calculator to work that through, or perhaps a previous discussion in this thread? (I believe I have seen some past discussions here, and will search again now).
Some voices on here also apparently advocate taking the money not put into the downpayment and investing it. That adds another layer to the calculations, not to mention potential risk, but might be worth considering. On the other hand, with the extra mortgage size that would require, and interest draw over the life of the mortgage, that would seem to pose some obvious challenges to make it come out ahead -- but I would love to see some examples one way or the other.
Scenario 1 (20%down):
934k-20% dp=747200 mortgage @2.2% (lowest today as per ratehub -- MortgagePal)
Scenario 2 (19%down):
934k-19% dp=777,723 (mortgage+CMHC) @1.99% (lowest today as per ratehub -- CanWise or HSBC)
Scenario 3 (10%down+invest remainder):
934k-10%down=866,659 mortgage+CMHC @1.99% (lowest today as per ratehub -- CanWise or HSBC) -Invest dp difference: $93,400
I'm guessing, however, that I would not qualify for the higher mortgage that results from this, in any case, since I think scenarios's 1&2 will already be near my max -- so this may be a non-starter.
So, attempting to crunch the first two scenarios on my own...
Results after 25yr:
Scenario 1: $970,981 total paid ($223,781 total interest) (3237/mo pmnt)
scenario 2: $986,858 total paid ($209,135 total interest) (3290/mo pmnt)
Is this close to correct?
So this seems to be telling me that even though putting 19% down results in a lower interest bill overall, it is still a larger total cash outlay needed, by $15,877
over the life of the mortgage. I assume I could shave it even closer to the CMHC trigger threshold, say, 19.99% down, and perhaps generate a closer race.
Any confirmations or other thoughts appreciated.
Best rate for a high ratio mortgage is 1.95% 5-year variable.
Mortgage Agent and Real Estate Sales Representative