Real Estate

The Official Mortgage Rates Thread

  • Last Updated:
  • Sep 23rd, 2018 12:01 pm
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Sep 13, 2011
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RD2017 wrote:
Jan 12th, 2018 7:20 pm
My mortgage is due to renew in three weeks. My current lender offered me 2.89% 2-yr fixed but I have to renew it before Jan 17th in order to get the deal.
Mortgage is 180k, value is over 700k. Any good deal around here?
That's a decent rate for a 2 year fixed if it's the 2 year that you are looking for. If you are looking for a longer term, you may be able to get a 5 year fixed for the same rate.
Paul Meredith
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CityCan Financial Corp (lic. 10532)
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yellowlight18 wrote:
Jan 12th, 2018 9:03 pm
I have a variable rate at 2.5%. Should I consider switching to fixed rate?
Converting your fixed to variable is not really a strategy I suggest for most people. By converting to a fixed rate, you're also taking a gamble that prime rate will continue to increase further since your new rate and payment would still be much lower than it would be if you just accepted the increase on your variable.

But will it continue to increase? There is speculation that it will, and possibly as soon as this Wednesday, January 17th. Maybe this will happen or maybe it won't. Or maybe it will increase again and then drop again next year. Anything can happen, and these fluctuations are all part of having a variable rate.

Many with variable rates will ask if it's a good time to lock in at the first word of a potential rate increase. When taking a variable rate, it's understood that you have a floating rate, and this rate can change in either direction over your 5 year term. Many have become complacent over the past several years considering we have not had an increase to prime rate since September 2010 (until mid-2017 that is). For this reason, many have become comfortable with thinner spreads thinking that the rates will not be increasing any time soon.

The truth is, if you don't like being exposed to market fluctuations, or if the thought of your rate or payment increasing, then variable rate was likely not the best product choice for you. If you are in a variable rate mortgage now, then i would stay in it and ride it out for the term. However, if you are having a tremendous amount of anxiety to the point where you are fraught with worry and having trouble sleeping at night, then you'll want to do what will set your mind at ease. In some cases, if you want to switch to a fixed, it may even make more sense to pay the 3 months interest penalty and do a switch to another lender as the rate that would be offered to you may very well be low enough to offset the penalty.

It really depends on just how much of a spread you have on your variable. If you have a thin spread between what you are paying now and what your lender is offering you. It's a bit of a different situation when you have a thinner spread and locking into a fixed might not be a bad idea in that case. You would still be betting on more increases to prime by doing so however, so it really depends on the person. Anyone taking a variable with a very thin spread could potentially consider this, but in these cases, fixed rates would have likely been the better choice for them to begin with. As mentioned, when taking a variable rate, you're accepting market fluctuations. Your expecting your rate and payment to be 'variable'. No one knows for sure what is going to happen. Like i said, maybe the rate will increase or maybe it won't. Maybe it will drop next year. We don't know. If you are worried about it, I don't see any harm in you asking your lender which rate they can lock you in for and if it will change after the announcement expected at 10am this Wednesday. It really shouldn't change once you know the outcome.
Paul Meredith
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CityCan Financial Corp (lic. 10532)
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RogueCruze wrote:
Jan 12th, 2018 4:55 pm
Mortgage is up for renewal in March. First time renewing. Local broker is saying 3.09 fixed for 5 years or prime -0.65 variable.

Are these decent rates? What do people think is the better option between the two. I'm leaning towards variable.
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.

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. Your choice 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 an insured mortgage is 2.79%, as previously mentioned. which is 0.84% higher than the variable at 1.95% (keep in mind, prime rate could increase this Wednesday, which would increase this rate to 2.19%). This difference would represent a substantial savings.... if the rate stayed that way. Even if it increased on Wednesday, you would still have a spread of 0.59%, which would still represent a large savings... again, if the rate stayed that way. The rate remaining unchanged over the term is an unrealistic expectation however, particularly considering that it's possible the Bank of Canada will increase their overnight rate again before the end of the year (which is what determines prime rate). Whether this happens or not is speculation, but it's something that you need to be prepared for and factor into your decision.

There is nothing to say however that the rate won't start to settle back down. These fluctuations are to be expected when taking a variable rate mortgage and is something you would need to feel comfortable with.

Personally? I think variable is a great option right now.

Hope you find this helpful.
Paul Meredith
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CityCan Financial Corp (lic. 10532)
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Feb 24, 2011
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Edmonton
Heres what Scotiabank offered me for a early renewal today. I was told by the "advisor" that in order to negotiate I need to get a quote from another institution and they would get back to me in a couple days. Not impressed with the service they offer especially considering I've been a customer for over 10 years.
Looking to renew.

Fixed
2yr 3.13%
3yr 3.29%
4yr 3.49%
5yr 3.57%

Variable
3yr 3.00% capped @ 3.74%

Mortgage amount: $270,000 remaining
Property value: approx $400,000
CMHC Insured? No
Location: Edmonton
Maturity Date: May 30, 2018
Credit: Excellent

Can better be had out there right now?
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May 15, 2017
64 posts
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Jake1982 wrote:
Jan 13th, 2018 4:29 pm
Heres what Scotiabank offered me for a early renewal today. I was told by the "advisor" that in order to negotiate I need to get a quote from another institution and they would get back to me in a couple days. Not impressed with the service they offer especially considering I've been a customer for over 10 years.
Looking to renew.

Fixed
2yr 3.13%
3yr 3.29%
4yr 3.49%
5yr 3.57%

Variable
3yr 3.00% capped @ 3.74%

Mortgage amount: $270,000 remaining
Property value: approx $400,000
CMHC Insured? No
Location: Edmonton
Maturity Date: May 30, 2018
Credit: Excellent

Can better be had out there right now?
Seems like most big banks are offering 5 year fixed rates for 3.19% with no resistance. Even lower if they want to compete to keep your business.
Newbie
Feb 24, 2011
51 posts
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Edmonton
Thanks, guess its too be expected from a bank not going to accept their sucker offer. Surprised at how much resistance I got from Scotiabank to negotiate though. Any idea what can be had on the variable rate side?
Newbie
Jan 11, 2018
5 posts
2 upvotes
PaulMeredith wrote:
Jan 13th, 2018 9:11 am
There are SIGNIFICANTLY lower available. As your mortgage is insured, the lowest 5 year fixed rate is 2.79% and the lowest variable is prime -1.25% (currently 1.95%).
Is prime -1.25 actually feasible? I would take that in a heartbeat
Newbie
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Jul 1, 2015
60 posts
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Vancouver, BC
Hi all,

Rental property renewal coming up.

March 23, 2018
Location: Vancouver, BC
More than 25% down payment when purchased
Mortgage Remaining: around $245,000
Property valued at: $700,000
Credit Rating: Excellent
Current lender is HSBC mortgage a 2-yr fixed at 2.14.

The early renewal offer:

5yrs variable Prime - 0.6
5yrs fixed = 3.14%
2yrs fixed = 2.89%

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

Thanks
Newbie
Jan 13, 2018
2 posts
Hi experts,

We're looking to buy a detached house as our primary residence in Markham, Ontario.

Purchase price: 1,200,000
Down payment: 240,000 or 20%
Closing date: 60 days or March 15
Credit score: Excellent
Gross annual income: 250K+
Location: Markham, Ontario
Debt: We have an existing mortgage on a property that we're keeping as a rental unit.

What are the best rates I can get for fixed and variable?

Any suggestions for brokers?

I am new here and appreciate your time and responses.

Thanks.
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RogueCruze wrote:
Jan 14th, 2018 12:37 am
Is prime -1.25 actually feasible? I would take that in a heartbeat
Providing the mortgage was originally insured, then yes, it's available.
Paul Meredith
Mortgage Broker, Author
CityCan Financial Corp (lic. 10532)
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Clutch77 wrote:
Jan 14th, 2018 1:39 am
Hi all,

Rental property renewal coming up.

March 23, 2018
Location: Vancouver, BC
More than 25% down payment when purchased
Mortgage Remaining: around $245,000
Property valued at: $700,000
Credit Rating: Excellent
Current lender is HSBC mortgage a 2-yr fixed at 2.14.

The early renewal offer:

5yrs variable Prime - 0.6
5yrs fixed = 3.14%
2yrs fixed = 2.89%

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

Thanks
Those are amazing rates for a rental property and you will not find lower anywhere else. I would be all over those.
Paul Meredith
Mortgage Broker, Author
CityCan Financial Corp (lic. 10532)
Deal Addict
User avatar
Sep 13, 2011
3825 posts
1246 upvotes
Toronto
Jake1982 wrote:
Jan 13th, 2018 4:29 pm
Heres what Scotiabank offered me for a early renewal today. I was told by the "advisor" that in order to negotiate I need to get a quote from another institution and they would get back to me in a couple days. Not impressed with the service they offer especially considering I've been a customer for over 10 years.
Looking to renew.

Fixed
2yr 3.13%
3yr 3.29%
4yr 3.49%
5yr 3.57%

Variable
3yr 3.00% capped @ 3.74%

Mortgage amount: $270,000 remaining
Property value: approx $400,000
CMHC Insured? No
Location: Edmonton
Maturity Date: May 30, 2018
Credit: Excellent

Can better be had out there right now?
Banks love to play these games with people. They aren't stupid, and they know exactly what else is out there, but they make you go through the work as they know that many people won't bother too and will just simply sign. This doesn't make any sense to most RFD'rs, yet there are so many people that fall into this category.

That being said, yes, you can get much lower rates than what you are being quoted.
Paul Meredith
Mortgage Broker, Author
CityCan Financial Corp (lic. 10532)
Newbie
Jan 13, 2018
1 posts
Location: Mascouche, Quebec
Mortgage amount: 244300
Property value: 289000
Credit rating: excellent
Mortgage: Desjardins collateral mortgage, Genworth insured
Renewal date: April 11th 2018

I'm looking for the best rate either variable 5 years or fixed 5 years.
Thanks and best regards,
Ric
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Feb 2, 2014
5275 posts
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spideyv wrote:
Jan 14th, 2018 2:21 am
Hi experts,

We're looking to buy a detached house as our primary residence in Markham, Ontario.

Purchase price: 1,200,000
Down payment: 240,000 or 20%
Closing date: 60 days or March 15
Credit score: Excellent
Gross annual income: 250K+
Location: Markham, Ontario
Debt: We have an existing mortgage on a property that we're keeping as a rental unit.

What are the best rates I can get for fixed and variable?

Any suggestions for brokers?

I am new here and appreciate your time and responses.

Thanks.
For a million dollar property, 3.09% 5-year fixed is the best rate out there.
Kevin Somnauth, CFA
Mortgage Agent and Real Estate Sales Representative
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Feb 2, 2014
5275 posts
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Toronto
poussin wrote:
Jan 14th, 2018 8:36 am
Location: Mascouche, Quebec
Mortgage amount: 244300
Property value: 289000
Credit rating: excellent
Mortgage: Desjardins collateral mortgage, Genworth insured
Renewal date: April 11th 2018

I'm looking for the best rate either variable 5 years or fixed 5 years.
Thanks and best regards,
Ric
1.95% (Prime-1.25) 5-year variable and 2.79% 5-year fixed are the best rates out there for you.
Kevin Somnauth, CFA
Mortgage Agent and Real Estate Sales Representative

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