Real Estate

The Official Mortgage Rates Thread

Newbie
Jul 6, 2014
32 posts
12 upvotes
Toronto, ON
Hi,

Hoping to see if anyone can help.

I'm looking for a mortgage on a condo property that closes on August 13.

Location: North York, ON
Purchase price: 390k
Owner occupied
Looking for a 5 years fixed.
Closing date is set for Aug 13, 2019.
Putting 20% down.

Thanks in advance!
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Jan 31, 2018
6523 posts
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DividendEclipseblog wrote: Hi,

Hoping to see if anyone can help.

I'm looking for a mortgage on a condo property that closes on August 13.

Location: North York, ON
Purchase price: 390k
Owner occupied
Looking for a 5 years fixed.
Closing date is set for Aug 13, 2019.
Putting 20% down.

Thanks in advance!
2.69% is your best rate with 20% down 5 yr fixed

Phil
Phil Cragg
Mortgage Agent
Mortgage Outlet Inc Broker License #12628
Newbie
Jun 6, 2019
20 posts
5 upvotes
firsthomebuyer wrote: Hey, have a question.
The offer says the rate is 2.54%, but with the Annual Percentage Interest that is compounded semi annualy it's 2.61% (its in the fine print)
Why is it no advertised as 2.61% in the first place then?
From Investopedia:
"APR is expressed as a percentage that represents the actual yearly cost of funds over the term of a loan. This includes any fees or additional costs associated with the transaction. As loans or credit agreements can vary in terms of interest-rate structure, transaction fees, late penalties and other factors, a standardized computation such as the APR provides borrowers with a bottom-line number they can easily compare to rates charged by other lenders. "

Basically we would all benefit if APR was what was advertised instead of just interest rate.. Fees can vary causing same interest rate to have very different APR..

2.61APR on 2.54% seems high.. it should be closer to 2.56 or 2.57..(correct me if I'm wrong)
Banned
Sep 19, 2012
1253 posts
1867 upvotes
Calgary
rateconnect wrote: Best rate on a 25 yr amortization would be 2.69% 5 yr fixed & 2.95% prime -1% on the variable side
Does one need to have a HELOC attached to that 2.69% mortgage? Is it a collateral charge?
DividendEclipseblog wrote: I'm looking for a mortgage on a condo property that closes on August 13.
Location: North York, ON
Purchase price: 390k
Owner occupied
Looking for a 5 years fixed.
Closing date is set for Aug 13, 2019.
Putting 20% down.
Thanks in advance!
I believe you can get 2.59% on that one.
WorldCitizen007 wrote: Basically we would all benefit if APR was what was advertised instead of just interest rate.. Fees can vary causing same interest rate to have very different APR..
2.61APR on 2.54% seems high.. it should be closer to 2.56 or 2.57..(correct me if I'm wrong)
I suspect that the actual contract rate is 2.59%. Applying semi-annual compounding gets you to the 2.61%.
Last edited by ahlaker on Jul 18th, 2019 8:44 pm, edited 1 time in total.
Nikola Alaica, CPA, CA | Tax, Accounting, Mortgages
Newbie
Jun 20, 2019
13 posts
4 upvotes
WorldCitizen007 wrote: From Investopedia:
"APR is expressed as a percentage that represents the actual yearly cost of funds over the term of a loan. This includes any fees or additional costs associated with the transaction. As loans or credit agreements can vary in terms of interest-rate structure, transaction fees, late penalties and other factors, a standardized computation such as the APR provides borrowers with a bottom-line number they can easily compare to rates charged by other lenders. "

Basically we would all benefit if APR was what was advertised instead of just interest rate.. Fees can vary causing same interest rate to have very different APR..

2.61APR on 2.54% seems high.. it should be closer to 2.56 or 2.57..(correct me if I'm wrong)
Thank you for your message.

Hmm, now I'm a little confused...
There is a contract rate: 2.59%
There is an effective rate or smth: 2.54%
There is an APR: 2.61%

Seems like everything is calculated as 2.54% in the fine print, what is the contract rate then?
Banned
Sep 19, 2012
1253 posts
1867 upvotes
Calgary
firsthomebuyer wrote: Thank you for your message.

Hmm, now I'm a little confused...
There is a contract rate: 2.59%
There is an effective rate or smth: 2.54%
There is an APR: 2.61%

Seems like everything is calculated as 2.54% in the fine print, what is the contract rate then?
This. The contract rate is what your payments are based off of. I suspect the effective rate factors in the cash-back that you got, right? The APR is calculated based off of the contract rate.
Nikola Alaica, CPA, CA | Tax, Accounting, Mortgages
Newbie
Jun 20, 2019
13 posts
4 upvotes
ahlaker wrote: This. The contract rate is what your payments are based off of. I suspect the effective rate factors in the cash-back that you got, right? The APR is calculated based off of the contract rate.
Thank you for explanations.

The contract rate seems like 2.54% - at least all the docs says that... but the APR is 2.61% - which seems like a little high.
What is the difference for me if the APR is different, say 2.56 vs 2.61 ?
Deal Guru
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Feb 2, 2014
11203 posts
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Toronto
ahlaker wrote: MCAPs Western BDM confirmed to me that they’d do it at 25 years. Only reason MCAP wouldn’t do it is because of 30 years. I’m only going based on what I was told. It goes against what the rate sheet says so who knows ...
They don’t go above 70% ltv for a refinance on the amortization portion. Investors won’t allow it on the fusion.
Kevin Somnauth, CFA
Principal Broker/Owner - First Toronto Mortgage - MA (Ontario #13176, BC #X301007)
Real Estate Salesperson - Century 21 Innovative
Newbie
Jul 17, 2019
1 posts
Hi, I am a first time buyer looking for a 5 year fixed rate mortgage:
-What is the purchase price? $430k
-How much is the down payment? $43k
-Where it the property located? Calgary, AB
-When is the closing date? September 15, 2019
-Will the property be owner-occupied or a rental? owner-occupied

Please let me know what rates I can expect or if you know of any recommended brokers in Calgary.
Newbie
Jul 16, 2019
5 posts
1 upvote
ahlaker wrote: - No issues with Duca. Great institution. They're not as "famous" as those places with the Lion or the Penguin, but they're great nonetheless!
- I think anyone who knows where rates are going to be in 2 years won't be posting on an online forum. Smiling Face With Open Mouth Think of a 2-year product as a "quasi" variable rate mortgage (with a bit higher penalty).
- Genworth insurance is the same as CMHC. No issues.
- If Duca is using posted rates that's harsher than many of the non-bank lenders who use "best" rate or "discounted" rate when calculating the IRD. I don't deal with them but maybe the other guys can chime in as to whether they use posted or discounted rates.
Thank you
Banned
Sep 19, 2012
1253 posts
1867 upvotes
Calgary
ccfraser wrote: Hi, I am a first time buyer looking for a 5 year fixed rate mortgage:
-What is the purchase price? $430k
-How much is the down payment? $43k
-Where it the property located? Calgary, AB
-When is the closing date? September 15, 2019
-Will the property be owner-occupied or a rental? owner-occupied

Please let me know what rates I can expect or if you know of any recommended brokers in Calgary.
2.54% for your situation. I’m in Calgary and I’d happily recommend myself :)

Good luck!
Nikola Alaica, CPA, CA | Tax, Accounting, Mortgages
Newbie
Jan 1, 2007
6 posts
I am being offered 2.59% 5 year fixed by HSBC with $2k cash back. Not high ratio. Mortgage renewal, switching from another back,

Any watch outs with their product?
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Sep 19, 2012
1253 posts
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Calgary
cold.latte wrote: I am being offered 2.59% 5 year fixed by HSBC with $2k cash back. Not high ratio. Mortgage renewal, switching from another back,
Any watch outs with their product?
Very good deal. Competitive with what the broker channel can offer. Two things:

1) From what I understand you have to pay the legal and appraisal fees with HSBC and that's what the $2k is meant to cover. The lenders that the broker channel would use (MCAP, CMLS among others) would pay for all the transfer costs for you. So - it's not quite a full $2k better than what a broker would give you especially if you convince a broker to give cash back Smiling Face With Open Mouth

2) HSBCs prepayment penalty is harsher than the ones offered by the broker channel lenders. Their calculation is based on the discount to posted rate (from inception) being applied to the remaining term. Arguably this is a non-issue in a rising interest rate environment and particularly not relevant today when we have an inverted yield curve (ie: short term rates are higher than long term rates). Still something to be aware of.

I'm biased as obviously I'd like to be the one selling you a mortgage (as I'm sure the other gents would be), but it really depends on how worried you are about a prepayment. You've obviously gone through one 5 year term so you've proved you can get through without breaking the mortgage. Decide based on who you like the best? Smiling Face With Open Mouth

Good luck!
Nikola Alaica, CPA, CA | Tax, Accounting, Mortgages
Newbie
Jul 17, 2019
5 posts
1 upvote
rateconnect wrote: 5 yr fixed 2.69% available on 25 yr am 2.79% on a 30 yr product

Many thanks

Phil
Which lender is this offer from Phil?
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Sep 13, 2011
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Toronto
cold.latte wrote: I am being offered 2.59% 5 year fixed by HSBC with $2k cash back. Not high ratio. Mortgage renewal, switching from another back,

Any watch outs with their product?
Ahlaker gave you a great response, but I just wanted to add a bit more. HSBC, just like with the big 5 major banks, use a much harsher formula for calculating your IRD penalty if you found yourself in a position where you needed to break the mortgage early. This can amount to as much as 500% higher than most of the non-bank lenders, including MCAP, First National, etc. No one ever expects to break their mortgage, yet so many people do. Sometimes life can be hard to predict and sometimes it throws your curveballs. I've had clients who were adamant that they would not be breaking their mortgage before 5 years, yet a couple of years later, their circumstances changed.

While HSBC has a recognizable brand, you may also want to do some research on them before choosing use them for your mortgage. Here are some links:

https://www.consumeraffairs.com/finance ... tgage.html
https://www.yelp.ca/biz/hsbc-bank-canada-vancouver-16
https://www.yelp.ca/biz/hsbc-bank-canada-toronto-6
http://forums.redflagdeals.com/official ... #p28285811
http://forums.redflagdeals.com/official ... #p27276205
http://forums.redflagdeals.com/official ... #p29726654
http://forums.redflagdeals.com/official ... #p30703004
Paul Meredith
Mortgage Broker, Author - CityCan Financial Corp
(lic. 10532)
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I am about two weeks from being able to renew early with RBC. Looking to get an idea of current alternatives. I am sure it's been answered before, but what is a rough estimate of costs for switching out of an RBC Homeline (collateral) mortgage? I do understand that I would have to wait until maturity to switch, and need to compare to slight benefit of lower rate of early renewal (assuming less than current 2.94%).

-How much is the mortgage owing? >$300K, but may increase to up to $350K for a backyard reno
-Roughly, what is the current market value of the property? +$1M
-Which city is the property located in? Waterdown, ON
-Is the property owner-occupied or a rental? Owner-occupied
-Who is your current lender? RBC
-Do you have a HELOC tied to the mortgage? Yes, Homeline
-Is the mortgage CMHC insured? No
-When did you buy the property? 2007
-When is your renewal date? Dec 4, 2019
-Other details - looking to have a 10 year amortization for remaining balance.
Newbie
Jul 17, 2019
2 posts
Looking to renew my mortgage, currently with national bank.

-How much is the mortgage owing? 480,000
-Roughly, what is the current market value of the property? 700,000
-Which city is the property located in? Ottawa
-Is the property owner-occupied or a rental? Owner-occupied
-Who is your current lender? National Bank (3 yr)
-Do you have a HELOC tied to the mortgage? No
-Is the mortgage CMHC insured? Yes (gave 10% down)
-When did you buy the property? 2016
-When is your renewal date? September 2019

Thanks so much in advance, appreciate the advise.
Banned
Sep 19, 2012
1253 posts
1867 upvotes
Calgary
knapper wrote: I am about two weeks from being able to renew early with RBC. Looking to get an idea of current alternatives. I am sure it's been answered before, but what is a rough estimate of costs for switching out of an RBC Homeline (collateral) mortgage? I do understand that I would have to wait until maturity to switch, and need to compare to slight benefit of lower rate of early renewal (assuming less than current 2.94%).

-How much is the mortgage owing? >$300K, but may increase to up to $350K for a backyard reno
-Roughly, what is the current market value of the property? +$1M
-Which city is the property located in? Waterdown, ON
-Is the property owner-occupied or a rental? Owner-occupied
-Who is your current lender? RBC
-Do you have a HELOC tied to the mortgage? Yes, Homeline
-Is the mortgage CMHC insured? No
-When did you buy the property? 2007
-When is your renewal date? Dec 4, 2019
-Other details - looking to have a 10 year amortization for remaining balance.
Most good rates are only available for up to 120 days so you have to wait a week or two. Also - if you are increasing the loan amount you’ll have a “refinance” and the rates will be larger. Last point: some lenders have minimum amortizations but I think generally 10 years should be OK.

That said rates (5-year fixed) would be 2.59% for a switch and 2.69% for a refinance. You could also add a HELOC separately after the switch (goto motusbank and you can get p+0.05% ish on your HELOC).

Good luck!
Nikola Alaica, CPA, CA | Tax, Accounting, Mortgages
Deal Fanatic
User avatar
Sep 13, 2011
6996 posts
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Toronto
knapper wrote: I am about two weeks from being able to renew early with RBC. Looking to get an idea of current alternatives. I am sure it's been answered before, but what is a rough estimate of costs for switching out of an RBC Homeline (collateral) mortgage? I do understand that I would have to wait until maturity to switch, and need to compare to slight benefit of lower rate of early renewal (assuming less than current 2.94%).

-How much is the mortgage owing? >$300K, but may increase to up to $350K for a backyard reno
-Roughly, what is the current market value of the property? +$1M
-Which city is the property located in? Waterdown, ON
-Is the property owner-occupied or a rental? Owner-occupied
-Who is your current lender? RBC
-Do you have a HELOC tied to the mortgage? Yes, Homeline
-Is the mortgage CMHC insured? No
-When did you buy the property? 2007
-When is your renewal date? Dec 4, 2019
-Other details - looking to have a 10 year amortization for remaining balance.
You're still quite early to be shopping as the maximum rate hold for switches is typically 90 days (with the odd exception at 120, however 120 days is typically just for purchases).

As you are in a collateral charge mortgage, the additional costs such as legal fee of around $800, plus appraisal fee of around $300. This is in addition to your lender's discharge fee of around $300. These costs can vary from province to province. There are some lenders who will cover ALL of the costs for you, however sometimes there is a rate premium of 0.05% in that case. One way or another, you pay the costs.

As of right now, the lowest 5 year fixed for your situation would be 2.59%. I would NOT early renew with RBC. Banks love to try to offer people early renewals, and may even make it sound like they're getting a great deal. They usually set a deadline where you have to agree within a few days. Over the past few weeks, there was some upward pressure on fixed mortgage rates. As bond yields have now started to trend back down (fixed mortgage rates are based on bond yields), upward pressure on mortgage rates has been relieved.

I would sit tight for now and stay tuned to this board for updates. 90 days from December 4th is September 5th. That is when you'll want to start shopping (assuming we don't see any major upward pressure on fixed rates over that period. Again, stay tuned to this board).
Paul Meredith
Mortgage Broker, Author - CityCan Financial Corp
(lic. 10532)

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