Real Estate

The Official Mortgage Rates Thread

  • Last Updated:
  • Jan 17th, 2018 2:12 am
Deal Addict
Feb 2, 2014
4336 posts
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Toronto
irumsby wrote:
Jan 10th, 2018 9:46 pm
Hello all,

I have to renew my mortgage on April 1st

Location: Burlington
Mortgage amount: $275,000
Property valued at: $850,000
Credit Rating: Excellent

Current lender is TD collateral mortgage a 2-yr fixed at 2.20. They made me an offer for 2.70% for 5-yr variable. 5 year at 3.24 and 2 year at 2.90

Looking to find the best rate. Not sure whether to go with variable or fixed.

Thanks

Ian
You can get 2.01% 5-year variable and 2.89% 5-year fixed. If your mortgage is insured, even lower.

If you have a collateral charge mortgage with TD, you have to cover legal fees though (about $800).
Kevin Somnauth, CFA
Mortgage Agent and Real Estate Sales Representative
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Sep 13, 2011
3428 posts
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Toronto
irumsby wrote:
Jan 10th, 2018 9:46 pm
Hello all,

I have to renew my mortgage on April 1st

Location: Burlington
Mortgage amount: $275,000
Property valued at: $850,000
Credit Rating: Excellent

Current lender is TD collateral mortgage a 2-yr fixed at 2.20. They made me an offer for 2.70% for 5-yr variable. 5 year at 3.24 and 2 year at 2.90

Looking to find the best rate. Not sure whether to go with variable or fixed.

Thanks

Ian
Whether to go fixed for variable really depends on the person, and there is no right or wrong answer here. In the past, homeowners have typically come out ahead with variable rate mortgages over fixed. For this reason alone, many of them continue to follow that trend, but this doesn't necessarily mean this is the best path to follow for everyone.

When choosing between fixed and variable, one borrower may not feel comfortable with any sort of risk at all while another may have a very high tolerance for it. What is right for you really comes down to where on the spectrum you fall, and your mortgage professional should take the time to discuss this with you. Sometimes I’ll suggest for a client to go fixed, but then I may suggest variable to the very next client I speak with. Just because a specific mortgage is right for one person doesn’t mean it’s right for another. If you aren’t comfortable with the fact that your rate and payment could increase at any time, then a variable rate mortgage probably isn’t for you, regardless of how big the spread is.

There is one additional benefit to variable over fixed. If you found yourself in a position where you needed to break your mortgage early, then the penalty may be lower… in some cases, substantially lower.

Right now, the lowest 5 year fixed for your situation would be 2.89% and lowest variable would be prime -1.19% (2.01% currently). The variable here would represent a substantial savings.... if the rate stayed that way. That is an unrealistic expectation however, particularly considering that it's widely expected that the Bank of Canada will increase their overnight rate again soon (which is what determines prime rate), potentially as soon as next week. This is a very strong possibility. Should this happen, your new variable rate would move from 2.01 to 2.26%....still substantially lower than the fixed option. Whether this happens or not is speculation... but considering how strong the predictions are that it will, it's something that you need to be prepared for and factor into your decision. Perhaps it will continue to rise further this year, or perhaps it won't. Maybe it will start to settle back down later in 2018. Anything can happen. These fluctuations are to be expected when taking a variable rate mortgage and is something you would need to feel comfortable with.

You'll be a bit more limited on options considering your collateral charge with TD, however you can still access the lowest rates on the market today. Normally with a collateral charge, you would have to pay legal and appraisal fees, on top of your discharge fee from your current lender. Approximately $1,400 in total. In this case, the appraisal and discharge fees would be covered for you. The legal fee of approximately $800 would get added to your mortgage amount, so you wouldn't have to fork out any money up front. The $800 charge is fairly insignificant when compared to the thousands you will save on the rate alone. Plus, you will no longer have a collateral charge, which would open up more options for you at the end of your next term.

Hope you find this helpful. :)
Paul Meredith
Mortgage Broker
CityCan Financial Corp (lic. 10532)
Member
Nov 28, 2010
287 posts
126 upvotes
CdnRealEstateGuy wrote:
Jan 10th, 2018 9:20 pm
Depends on the value of the property and the mortgage amount.
My mortgage amount will be 181100$ (244 000$was the price I bought the house 7 years ago). The value is around 325 000$.
Newbie
Mar 8, 2017
69 posts
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Does any one have experience with Manulife One mortgage. Any feedback, pros and cons is appreciated.
Newbie
Dec 15, 2006
5 posts
For the $800 fee charged when switching out of a collateral charge mortgage from TD, is this something that can be paid up front rather than be added to the mortgage (and charged interest over time)? I'm thinking of switching out of a collateral charge mortgage as well.

Also, with recent mortgage changes, has the max amortization been capped to 25 years, even for renewals? The reason I'm asking is my current TD mortgage has an amortization of 27 years remaining. I've been told by my broker that the max amortization I can set when I switch to a new lender would be 25 years. Is this correct? My original mortgage was for 30 years, with 20% down.
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Dec 10, 2008
3576 posts
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St. John's
Location: St. John's, NL
Mortgage amount: $190k remaining
Property valued at: $315,000
Credit Rating: Excellent

This is what I've been offered. Can anyone make sense of it? What should I go with? This a renewal.

5 year fixed traditional at 2.94%
5 year variable traditional at prime minus 0.95% (2.25%)
5 year fixed Low Rate Basic* 2.84%
5 year variable Low Rate Basic* at prime minus 0.99% (2.21%)

*The conditions for the Low Rate Basic are:

· There are no early renewals or assumptions allowed on the mortgage.
· If you end the term and do no further business with us due to refinancing with another lender, paying off the mortgage in full with your own money or selling and not repurchasing within 90 days and coming back to us (upon requalifying) then the penalty is calculated at 3% of your balance.
· You will still retain your 20% lump sum payments and 20% increase to payment privileges.
Let's hug it out
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Jr. Member
May 29, 2006
154 posts
20 upvotes
Hi I'm seeking some assistance here. My mortgage balance is $165k, I have 2 years and 4 months remaining on my variable rate mortgage and I'm currently paying 2.5% (p-0,75%).

I'm in the camp that we will get a rate hike next week, but what is more important to me is that interest rate futures are currently pricing in a further 3 BoC rate hikes for later this year.

And so, I'm considering going fixed but my current provider is quoting me their posted rates: 3.54% for 3 year fixed and 3.59% for 4/5 year fixed. In reading my previous renewal agreement, "The converted Mortgage will bear such interest rate and contain such other terms and provisions, including prepayment provisions, if any, as the Lender is then making available for that mortgage product to similar mortgagors on similar properties in similar circumstances for the term chosen." As such, I don't see how I'd be able to negotiate that down. What leverage do i have?

They also quoted me 3 months of interest and an admin fee totalling $1500 to go to another provider. Is it worthwhile for me to do so?
Newbie
May 3, 2013
14 posts
Ontario
CdnRealEstateGuy wrote:
Jan 10th, 2018 9:19 pm
Don’t ask. It makes zero sense.

Its a financial inefficiency.
Lenders have no motivation to find a way to insure/sell off these type of mortgages and offer better rates?
Deal Addict
Feb 2, 2014
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Toronto
Mudstrap wrote:
Jan 11th, 2018 8:59 am
My mortgage amount will be 181100$ (244 000$was the price I bought the house 7 years ago). The value is around 325 000$.
Fixed rate is good, variable rate can be slightly lower at 2.01% 5-year variable. Even if it is insured.
Kevin Somnauth, CFA
Mortgage Agent and Real Estate Sales Representative
Deal Addict
Feb 2, 2014
4336 posts
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Toronto
ryoukiddingme wrote:
Jan 11th, 2018 9:09 am
Does any one have experience with Manulife One mortgage. Any feedback, pros and cons is appreciated.
It's a collateral charge, as it's an all-in-one product. Besides that, no issues, assuming you're get a good rate.
Kevin Somnauth, CFA
Mortgage Agent and Real Estate Sales Representative
Deal Addict
User avatar
Sep 13, 2011
3428 posts
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Toronto
medlerman wrote:
Jan 11th, 2018 9:28 am
For the $800 fee charged when switching out of a collateral charge mortgage from TD, is this something that can be paid up front rather than be added to the mortgage (and charged interest over time)? I'm thinking of switching out of a collateral charge mortgage as well.

Also, with recent mortgage changes, has the max amortization been capped to 25 years, even for renewals? The reason I'm asking is my current TD mortgage has an amortization of 27 years remaining. I've been told by my broker that the max amortization I can set when I switch to a new lender would be 25 years. Is this correct? My original mortgage was for 30 years, with 20% down.
Not really, no. What you can do is apply the $800 to the mortgage after closing using your lump sum prepayment privileges which would then eliminate any interest you would pay on that amount.

Yes, your amortization would need to be lowered to 25 years.
Paul Meredith
Mortgage Broker
CityCan Financial Corp (lic. 10532)
Deal Addict
Feb 2, 2014
4336 posts
867 upvotes
Toronto
medlerman wrote:
Jan 11th, 2018 9:28 am
For the $800 fee charged when switching out of a collateral charge mortgage from TD, is this something that can be paid up front rather than be added to the mortgage (and charged interest over time)? I'm thinking of switching out of a collateral charge mortgage as well.

Also, with recent mortgage changes, has the max amortization been capped to 25 years, even for renewals? The reason I'm asking is my current TD mortgage has an amortization of 27 years remaining. I've been told by my broker that the max amortization I can set when I switch to a new lender would be 25 years. Is this correct? My original mortgage was for 30 years, with 20% down.
Yes, you can pay the legal fees in cash on closing.

Depends on the lender and product. You can still go up to 30 years, but some lender's products are capped at 25 years.
Kevin Somnauth, CFA
Mortgage Agent and Real Estate Sales Representative
Deal Addict
Feb 2, 2014
4336 posts
867 upvotes
Toronto
PaulMeredith wrote:
Jan 11th, 2018 11:55 am
Not really, no. What you can do is apply the $800 to the mortgage after closing using your lump sum prepayment privileges which would then eliminate any interest you would pay on that amount.

Yes, your amortization would need to be lowered to 25 years.
I believe FNF and FCT will allow you to pay the legal fees in cash and will adjust this on the payout statement.
Kevin Somnauth, CFA
Mortgage Agent and Real Estate Sales Representative
Newbie
Dec 15, 2006
5 posts
Ok, thanks much for the help! I guess alternatively I could make a lump-sum payment of $800 before the mortgage gets discharged to the new lender. Leaning toward First National.
Newbie
Apr 28, 2015
26 posts
5 upvotes
East York, ON
PaulMeredith wrote:
Jan 10th, 2018 2:11 pm
You could renew with your current lender or do the switch to close 90 days from now and pay the penalty to your current lender to break your mortgage early.

Those are basically the only options.
Thanks. Can you renew through a broker, or just directly with the lender?

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