Real Estate

The Official Mortgage Rates Thread

  • Last Updated:
  • Jun 23rd, 2018 9:26 am
Newbie
Nov 4, 2004
93 posts
21 upvotes
I have two TD mortgages in Ottawa as follow:

Mortgage 1: Condo Investment Rental Property
$160K left in mortgage. Property valued at about $430K with expiry on July 1, 2018. I want to withdraw some equity of about $100K from this to invest in another investment property.

Mortgage 2: Principle Residence Detached House
$300K left in mortgage. Property valued at about $800K with expiry on September 1, 2018. I want to have a HELOC so that I can do the cash damming strategy from my rental unit(s) to save on my income taxes.

Family Income of $200K plus with excellent credit. Is it too early to start the process now but I do see the rates going up? What are the best rates available know both fixed and variable?
Newbie
May 24, 2016
19 posts
3 upvotes
Does anyone know anything about Meridian Credit Union Mortgages?
I signed up for the 5 year fixed at 3.12 today.
What are the major disadvantages with this mortgage?
Cant seem to find the terms and conditions.
Sr. Member
May 1, 2017
871 posts
187 upvotes
DealzToronto wrote:
Jan 15th, 2018 7:59 pm
Does anyone know anything about Meridian Credit Union Mortgages?
I signed up for the 5 year fixed at 3.12 today.
What are the major disadvantages with this mortgage?
Cant seem to find the terms and conditions.
Hi there,

Meridian is a great mortgage lender. They have bank penalties, which can be more expensive than a monoline lender's penalties, but otherwise their mortgages are full featured, the have great customer service (in my experience, at least), and they have solid heloc products available as well.

You can get a cheaper rate than that at Meridian through the broker channel, though!

Regards,

Connor
_________________________________
Connor Green
Mortgage Agent
Concierge Mortgage Group
#12179
Sr. Member
May 1, 2017
871 posts
187 upvotes
eman747 wrote:
Jan 15th, 2018 7:47 pm
I have two TD mortgages in Ottawa as follow:

Mortgage 1: Condo Investment Rental Property
$160K left in mortgage. Property valued at about $430K with expiry on July 1, 2018. I want to withdraw some equity of about $100K from this to invest in another investment property.

Mortgage 2: Principle Residence Detached House
$300K left in mortgage. Property valued at about $800K with expiry on September 1, 2018. I want to have a HELOC so that I can do the cash damming strategy from my rental unit(s) to save on my income taxes.

Family Income of $200K plus with excellent credit. Is it too early to start the process now but I do see the rates going up? What are the best rates available know both fixed and variable?
Hi there,

It's much too early to lock in rates in order to switch at renewal, unfortunately. Lender's will only issue 120 day commitments, meaning that in order to switch at maturity, you have to apply for your new mortgage no more than 120 days from your maturity date.

You can always switch mid term though if you really want to take advantage of lower rates while they last. Whether it would be worth it to do so is tough to say, as you never really know for sure where rates are headed, so it's nearly impossible to do an analysis of cost savings with any true accuracy.

You can get p-1.0% 5 year variable or better for a switch, and put a heloc in second position at p+1%.

You could get a 5 year fixed mortgage on your principle residence at around 3.05%-3.10% and put a heloc in second position behind it at prime plus 0.50%. If you want a readvanceable product, a combination mortgage and line of credit product where the loc limit increases as you pay down the balance of your mortgage, the rates would be higher, around 3.39% fixed and 2.80% variable and the loc would be at 3.2%.

Remember that to switch early you would need to pay an early discharge penalty which can be fairly costly depending on which lender you're currently with.

Regards,

Connor
_________________________________
Connor Green
Mortgage Agent
Concierge Mortgage Group
#12179
Newbie
May 24, 2016
19 posts
3 upvotes
Thanks Connor - so when you speak of bank penalties you are basically saying theirs are the same as the big banks?
What are the most common types of penalties? Sorry first time buyer here.
Newbie
Jan 14, 2018
7 posts
Hello. I am looking to get a second opinion for a April 25th mortgage renewal:
Location: GTA
Mortgage Balance: 124K (down from 205K amount at last renewal)
Property Value: 500K (condo townhouse)
Current Lender : 5 yr fixed at Street Capital @ 2.99, 20/20 prepayment
Insured by CMHC- Yes (original downpayment was only 10%)
I'm still waiting for the renewal rate offer from my current lender but the opinion I got from a Broker whose blog I've been reading is that this is considered a low value mortgage and my best option is to negotiate with my current lender. Is this right? Any advice as to the rates that may be available to me in this situation? Thanks in advance.
Newbie
User avatar
Jan 14, 2018
1 posts
Hello,

I'm hunting a house in Ottawa area and looking at mortgage pre-approval. Could someone who recently got pre-approval share some information about the rates? Thanks!

Location: Ottawa
Mortgage amount: $500K ~ $600K
Plan to pay more than 20% at initial signing: YES
Last edited by wxpatrick on Jan 15th, 2018 9:22 pm, edited 1 time in total.
//Patrick
Sr. Member
May 1, 2017
871 posts
187 upvotes
DealzToronto wrote:
Jan 15th, 2018 8:29 pm
Thanks Connor - so when you speak of bank penalties you are basically saying theirs are the same as the big banks?
What are the most common types of penalties? Sorry first time buyer here.
No problem at all. The penalty I'm talking about is the penalty to discharge the mortgage early. You may need to discharge the mortgage for many reasons, but the main reasons are refinancing the mortgage (accessing equity that you've accumulated to do renovations, pay out debts, invest, etc), or selling the property and not porting the mortgage to a new property.

Not many people think that they will discharge the mortgage early, but the vast majority of borrowers do, so it's important to be aware of what it will cost you should you need to discharge the mortgage early.

With a fixed rate mortgage, typically, you will either have to pay 3 months worth of interest (pretty self explanatory), or the interest rate differential penalty (IRD), whichever is greater. The interest differential penalty is the one to look out for as it can be very expensive under certain circumstances.

Banks calculate the IRD using their posted rate which is usually much higher than the contract rate (the rate of interest you're actually paying), which leads to artificially inflated IRD penalties. Most monoline lenders (MCAP, RMG, CMLS, First National,etc) don't have posted rates, which leads to much cheaper IRD penalties in comparison.

Hope that clears it up a bit.

Regards,

Connor
_________________________________
Connor Green
Mortgage Agent
Concierge Mortgage Group
#12179
Sr. Member
May 1, 2017
871 posts
187 upvotes
blackshirt wrote:
Jan 15th, 2018 9:05 pm
Hello. I am looking to get a second opinion for a April 25th mortgage renewal:
Location: GTA
Mortgage Balance: 124K (down from 205K amount at last renewal)
Property Value: 500K (condo townhouse)
Current Lender : 5 yr fixed at Street Capital @ 2.99, 20/20 prepayment
Insured by CMHC- Yes (original downpayment was only 10%)
I'm still waiting for the renewal rate offer from my current lender but the opinion I got from a Broker whose blog I've been reading is that this is considered a low value mortgage and my best option is to negotiate with my current lender. Is this right? Any advice as to the rates that may be available to me in this situation? Thanks in advance.
Hi there,

Whether or not you should switch lenders really depends on if you'll be saving any money by switching after factoring in all costs, and whether the amount you will be saving is worth going through the process for you. With a low mortgage balance such as yours, the interest saved by switching may not be worth it to you after factoring in some of the costs to switch. The lower the mortgage balance the less you'll save in interest, and the fees associated don't decrease with the mortgage balance.

It depends on what you're being offered at renewal, and what you next best alternative is. If you're being offered 3.49% by Street Capital and the next best alternative is 2.89%, then you would save almost $3500 in interest over the next 5 years by switching. It can be really inexpensive these days to switch, in some cases it can be free, in some cases you'll only have to pay the discharge fee to your current lender (~$350). So, in this example it would be worth it to switch lenders.

Of course, the likelihood is that the differential in rates being offered to you by Street Capital and the best alternative will be slimmer, but maybe not.

It's impossible to say without knowing what your options are!

Regards,

Connor
_________________________________
Connor Green
Mortgage Agent
Concierge Mortgage Group
#12179
Deal Expert
User avatar
Apr 21, 2004
44571 posts
11392 upvotes
Now that many borrowers could be stuck with their current lenders because of stress testing, will the Helpful Brokers on this thread be able to share some of the lenders who upon renewal, don't try to gouge or rip their existing clients off?

Maybe they will not give the best rates and that's understandable but perhaps renew at a rate only 20-40 bps higher than newly acquired clients.

I know teaser rates will have been the modus operandi for some the Big Five players and likely moreso going forward.
Deal Addict
User avatar
Jul 5, 2005
2169 posts
268 upvotes
Toronto
Still looking for guidance on a 2yr fixed rate renewal on a $365K remaining mortgage on rental property in Toronto initially valued at $500K. 28 yrs amotization remaining. Your advice would be appreciated.

Currently with Scotia and good credit rating.

Thanks
Sr. Member
May 1, 2017
871 posts
187 upvotes
GSD wrote:
Jan 15th, 2018 9:53 pm
Still looking for guidance on a 2yr fixed rate renewal on a $365K remaining mortgage on rental property in Toronto initially valued at $500K. 28 yrs amotization remaining. Your advice would be appreciated.

Currently with Scotia and good credit rating.

Thanks
Hello,

2 year rates aren't very appealing for rental properties right now. You can get 3.19% 3 year fixed for your rental, though.

Regards,

Connor
_________________________________
Connor Green
Mortgage Agent
Concierge Mortgage Group
#12179
Newbie
Jan 14, 2018
7 posts
GreenMortgages wrote:
Jan 15th, 2018 9:30 pm
Hi there,

Whether or not you should switch lenders really depends on if you'll be saving any money by switching after factoring in all costs, and whether the amount you will be saving is worth going through the process for you. With a low mortgage balance such as yours, the interest saved by switching may not be worth it to you after factoring in some of the costs to switch. The lower the mortgage balance the less you'll save in interest, and the fees associated don't decrease with the mortgage balance.

It depends on what you're being offered at renewal, and what you next best alternative is. If you're being offered 3.49% by Street Capital and the next best alternative is 2.89%, then you would save almost $3500 in interest over the next 5 years by switching. It can be really inexpensive these days to switch, in some cases it can be free, in some cases you'll only have to pay the discharge fee to your current lender (~$350). So, in this example it would be worth it to switch lenders.

Of course, the likelihood is that the differential in rates being offered to you by Street Capital and the best alternative will be slimmer, but maybe not.

It's impossible to say without knowing what your options are!

Regards,

Connor
Thanks Connor. I'll await the renewal letter from Street Capital. Fingers crossed it will give me some good options.
Deal Addict
User avatar
Jul 5, 2005
2169 posts
268 upvotes
Toronto
GreenMortgages wrote:
Jan 15th, 2018 10:17 pm
Hello,

2 year rates aren't very appealing for rental properties right now. You can get 3.19% 3 year fixed for your rental, though.

Regards,

Connor
Thanks Connor, getting 3.17% with Scotia for a 2 yr fixed renewing in Feb,
Sr. Member
May 1, 2017
871 posts
187 upvotes
alanbrenton wrote:
Jan 15th, 2018 9:43 pm
Now that many borrowers could be stuck with their current lenders because of stress testing, will the Helpful Brokers on this thread be able to share some of the lenders who upon renewal, don't try to gouge or rip their existing clients off?

Maybe they will not give the best rates and that's understandable but perhaps renew at a rate only 20-40 bps higher than newly acquired clients.

I know teaser rates will have been the modus operandi for some the Big Five players and likely moreso going forward.
Hi Alan,

The majority of borrowers that I have had over the last year or so have been taking insurable products where they had to qualify at 4.99%. The difference between 4.99% and, say, 5.34% (contract rate plus 2%, as an example) isn't all that much in terms of qualifying. Factor in potential earnings increases over 5 years, and the reduction in mortgage balance, and these borrowers will more than likely still qualify for great rates and products at maturity.

The borrowers who may struggle to qualify upon renewal are those who in recent years have extended themselves using 30 year amortizations and contract rate qualifying to max out their borrowing capacity, and then have borrowed up to that limit. These are the people who have lost ~20% of their borrowing power, and may experience some issues trying to get approved at maturity, in my opinion.

From my perspective, plenty of borrowers don't fully extend their borrowing capacity because the mortgage payments are outside of their budgets, even though they may qualify to do so.

In terms of lenders who don't gouge upon renewal, it's really impossible to say. Rates are fairly cyclical in terms of what lenders are offering. Sometimes Scotia has the best rates, sometimes MCAP, sometimes CMLS, but it often comes back around. In the same vein, there may be a point in time where one lenders is being very aggressive on renewals, and the next quarter they may not be as aggressive. It depends on the lenders current capacity and mortgage appetite, market share, etc at the time of your renewal.

It would be very difficult to try to pick a lender who will be aggressive with rate at renewal as these things change too frequently.

Cheers,

Connor
_________________________________
Connor Green
Mortgage Agent
Concierge Mortgage Group
#12179

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