Real Estate

The Official Mortgage Rates Thread

  • Last Updated:
  • Oct 17th, 2018 11:00 pm
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giovanni1993 wrote:
Dec 8th, 2017 2:14 pm
Hi all,

I'm looking to buy a condo downtown in the near future. Will be putting 20% down. Looking to spend $500-$600k as purchase price.
Went to a couple of big banks for Fixed mortgages (served up either as traditional or HELOC). I've seen better rates on RateHub and I'm trying to get them down to what CanWise can offer.

Cheers,
Giovanni
As per my post above, the 2.69% is NOT available for purchases with 20% down payment. This rate is available only for purchases with LESS than 20% down payment and therefore CMHC insured. Switches of mortgages that were originally insured also qualify for this rate. Same applies for the variable rate of prime -1.25%. Pretty much all the low rates you see advertised will be for insured mortgages only.

With 20% down, the lowest 5 year fixed right now is 2.94%, which is significantly better than anything you can get from a big bank. The banks will not match this rate. It also has much better terms and conditions including 20% prepayment privileges, and a much more consumer friendly formula for calculating penalty if you found yourself in a position where you need to break the mortgage early (penalty can be as much as 4-5 times higher with a major bank).

As with pretty much all of the low rate specials, this rate cannot be locked in until you have an accepted offer in place.
Paul Meredith
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CityCan Financial Corp (lic. 10532)
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Mar 2, 2015
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PaulMeredith wrote:
Dec 8th, 2017 2:26 pm
As per my post above, the 2.69% is NOT available for purchases with 20% down payment. This rate is available only for purchases with LESS than 20% down payment and therefore CMHC insured. Switches of mortgages that were originally insured also qualify for this rate. Same applies for the variable rate of prime -1.25%. Pretty much all the low rates you see advertised will be for insured mortgages only.

With 20% down, the lowest 5 year fixed right now is 2.94%, which is significantly better than anything you can get from a big bank. The banks will not match this rate. It also has much better terms and conditions including 20% prepayment privileges, and a much more consumer friendly formula for calculating penalty if you found yourself in a position where you need to break the mortgage early (penalty can be as much as 4-5 times higher with a major bank).

As with pretty much all of the low rate specials, this rate cannot be locked in until you have an accepted offer in place.
Thanks Paul! So basically there is no preapproval for these lower rates -- I will need to actually have an accepted offer before the rate can be locked; while the big banks are able to offer a locked rate before even having placed an offer. So, do you recommend for me to get a preapproval, and then when I actually have an accepted offer to then consider what the brokers can do?
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canehdianman wrote:
Dec 8th, 2017 1:53 pm
I discovered that as I played around a little bit more with Ratehub. I put 20% down, so I do not have a high ratio mortgage. The rate it shows now is 2.79%.



I do not have a LoC attached to my mortgage.



~ 850k



Info provided. thanks!
Thanks! I responded to your PM.
Paul Meredith
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CityCan Financial Corp (lic. 10532)
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giovanni1993 wrote:
Dec 8th, 2017 2:30 pm
Thanks Paul! So basically there is no preapproval for these lower rates -- I will need to actually have an accepted offer before the rate can be locked; while the big banks are able to offer a locked rate before even having placed an offer. So, do you recommend for me to get a preapproval, and then when I actually have an accepted offer to then consider what the brokers can do?
Correct. Brokers can lock in a rate for you prior to purchase as well, but it will be for much higher than what the lowest rates would be if you had an accepted offer in place.
I would HIGHLY suggest getting a pre-approval to find out how much you will qualify for and to ensure you do in fact qualify for what you are looking to purchase. You can do this either through a bank or through a broker.
Paul Meredith
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CityCan Financial Corp (lic. 10532)
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PaulMeredith wrote:
Dec 8th, 2017 2:38 pm
Correct. Brokers can lock in a rate for you prior to purchase as well, but it will be for much higher than what the lowest rates would be if you had an accepted offer in place.
I would HIGHLY suggest getting a pre-approval to find out how much you will qualify for and to ensure you do in fact qualify for what you are looking to purchase. You can do this either through a bank or through a broker.
Cool! Thanks for the info. I'd like to get preapproved for something sooner rather than later. CIBC and TD have already lowered their rates from their initial offerings, but I'm sure there is more room. Would you be able to see what the lowest preapprove-able rate is as a broker for 3yr, 4yr and/or 5yr fixed with 20% down? Feel free to PM me if you need more information.
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alucky17 wrote:
Dec 8th, 2017 11:32 am
Looking for options on mortgage rates.

Purchase price: $950K pre-construction
Down Payment: 20-25%
Closing: Apr 2018
Location: GTA

I was already approved through TD in August but closing was delayed.
What are the best rates out there for 25yr and 30yr amortization for 5 year fixed or 5 year variable in my situation?

Thanks!
If you can do 25% down, you can get 2.84% 5-year fixed, 25-year AM (.10% cheaper than with only 20% down).
Kevin Somnauth, CFA
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giovanni1993 wrote:
Dec 8th, 2017 2:44 pm
Cool! Thanks for the info. I'd like to get preapproved for something sooner rather than later. CIBC and TD have already lowered their rates from their initial offerings, but I'm sure there is more room. Would you be able to see what the lowest preapprove-able rate is as a broker for 3yr, 4yr and/or 5yr fixed with 20% down? Feel free to PM me if you need more information.
For a pre-approval, don't waste time shopping for rates. You won't get any competitive promo rates held. Just focus on get pre-approved, so you know your budget for a property. After that, start the process of looking for your perfect condo!
Kevin Somnauth, CFA
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Jan 9, 2014
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Good afternoon all,

I am in the market to buy a house in the price range of $450,000 to $480,000. I have down payment of 20% to 35% and annual salary of only $45,000. Been speaking to banks but can only receive a mortgage amount of $260,000 which isn't enough for the house I'm looking to buy or build. Can any professionals on here offer some advice on if there's any other methods to achieve this purchase price? I have no debt and clean credit history. Thanks All :)
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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.
Andre Oliveira - Mortgage Agent
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Dec 6, 2017
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Thanks.
So variable is still recommended than 3 or 5 year fix? I mean for my situation
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Oct 30, 2006
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Our mortgage for our condo is coming up for renewal in January, We have 250k left and TD has quoted us 3.14% for a five year fixed rate. We are thinking of buying a house in 2-3 years. This is a question to the active mortgage brokers in this thread; what would be my best option to go with? fixed or variable? what rates are you guys offering?
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How much you can qualify for is determined based on certain calculations.. and the formula is the same, bank, monoline, etc. There may be some alternatives to qualify for a bit more but you need to speak to a mortgage professional to evaluate the whole situation and understand the costs associated, and options available.
Kaguro wrote:
Dec 8th, 2017 4:05 pm
Good afternoon all,

I am in the market to buy a house in the price range of $450,000 to $480,000. I have down payment of 20% to 35% and annual salary of only $45,000. Been speaking to banks but can only receive a mortgage amount of $260,000 which isn't enough for the house I'm looking to buy or build. Can any professionals on here offer some advice on if there's any other methods to achieve this purchase price? I have no debt and clean credit history. Thanks All :)
Andre Oliveira - Mortgage Agent
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karan_9 wrote:
Dec 8th, 2017 6:46 pm
Our mortgage for our condo is coming up for renewal in January, We have 250k left and TD has quoted us 3.14% for a five year fixed rate. We are thinking of buying a house in 2-3 years. This is a question to the active mortgage brokers in this thread; what would be my best option to go with? fixed or variable? what rates are you guys offering?
5 year fixed rates can vary from 2.69% to 3.49%. HUGE range, depending on your situation. The 2.69% would be available to those either purchasing with LESS than 20% down payment, or those switching a previously insured mortgage. So if you put down less than 20% when you originally bought the home, you would qualify for the 2.69%. If you have at least 35% equity in the home, and the value of the home is under $1 million, lowest 5 year fixed would be 2.79%. If it was a rental property, rate would be 3.49%.

To actively quote you, we would need to now the following:

- market value of home
- mortgage amount ($250,000 in this case)
- was the original mortgage insured? (meaning, did you pay CMHC insurance when you originally bought the home).
- is this your primary residence?

If you are thinking about moving in 2-3 years, then I would suggest either a 3 year term (as that is the minimum for switches), or a variable (as it has a lower penalty to break). Of course, you could always take a longer fixed term and then port the mortgage over, but that is not always the best strategy. Sometimes it's better to take an option with a lower penalty such as a variable in order to keep your options open when you purchase the new home.

Another thing to take note of... since you are with TD, you are likely in a collateral mortgage. TD registers ALL their mortgages as collateral charges (as does National Bank and Tangerine). Normally at the end of your term, you can submit to another lender at no cost to you. This isn’t the case with a collateral mortgage and changing lenders at the end of the term would typically require a refinance (as opposed to a simple switch). To change lenders at the end of your term, you would need to pay legal fees (approximately $800), appraisal (approximately $300) as well as discharge fee (also around $300). These are all 3rd party costs. On top of that, refinances often come with higher rates than purchases.

Fortunately, there are some lenders now who are offering switches from a collateral charge mortgage which would allow you to still get lowest rates. However, depending on the lender and product, you still may be required to pay the legal fee (around $800). There still may be opportunity to save you quite a bit over what TD is offering you at maturity. If you provide the information requested above, we can quote you some rates.
Paul Meredith
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CityCan Financial Corp (lic. 10532)
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Nov 21, 2017
11 posts
Montreal, QC
I have a mortgage with a HELOC at RBC. The bank confirmed that this was a collateral mortgage, but when I asked them if there were fees associated with switching lenders at the end of the term, their answer was no. Is it possible that the rules are different in Quebec from the rest of Canada?
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mosaic99 wrote:
Dec 7th, 2017 7:40 pm
Hi,
Looking for some opinions and suggestions.
I'm currently on 5 year variable 2.40% and still have 3 more years left. Property is in BC, purchase price is 750k, current mortgage is 470K. Should I break the term and switch to a better rate or stay with the current one? What better rate could I get if switch? fix and variable. 3 and 5 year.

Thanks a lot
MH
mosaic99 wrote:
Dec 8th, 2017 6:29 pm
Thanks.
So variable is still recommended than 3 or 5 year fix? I mean for my situation
It's really hard to say no to variable these days considering how large the spreads are. Your lowest rate would be prime -1.19% (2.01%) if you were to make the switch. Your penalty would be about $3,400 (including discharge fee of an estimated $300). Factoring in this about, you would still save around $2,000 for the remaining 3 years of your mortgage. So switching does make sense.
Paul Meredith
Mortgage Broker, Author
CityCan Financial Corp (lic. 10532)

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