Real Estate

The Official Mortgage Rates Thread

  • Last Updated:
  • Oct 21st, 2018 12:37 pm
Deal Addict
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Dec 1, 2015
1651 posts
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Etobicoke, ON
Paul already replied, but I want to add a few more details, to help you understand this.

When a client purchases a property with less than 20% down payment, default insurance is *mandatory*, so the client will always pay that insurance, through CMHC/Genworth/Canada Guaranty. So it means that the lender does not incur any costs to have that mortgage insured. On the other hand, when you have 20% or more, as several lenders want to obtain a similar type of insurance, often referred to as bulk insurance, this insurance cost falls on the lender, since they are the ones choosing to have the mortgage insured. Up until some 2-3 years ago, the cost of bulk insurance was fairly low and most lenders would simply treat a deal at 80% LTV (Loan To Value) the same way as deal at 60% LTV. But recently, with the endless new mortgage rules that changed in the last 2 years, the cost of bulk insurance went up significantly, particularly in the higher LTV brackets. So, if the lender has a deal at 80% LTV, the cost of insuring that mortgage is MUCH higher than a deal at 75%, or 70%, 65% LTV, etc. The result is that lenders will factor this cost in the calculation of what rates they can offer.

Imagine 4 brothers, all working for the same company, all with excellent credit, but different amounts for down payment, all getting a 5y fixed rate

John has 10% down payment - his mortgage must be insured, and that cost is his responsibility (as any insured mortgage). He would get 2.94%.
Michael has 20% down payment - at 80% LTV, the lender offers him 3.29%.
Anthony has 25% down payment - at 75% LTV, the lender offers him 3.19%.
Josh has 35% down payment - at 65% LTV, the lender offers him 2.99%.

All of these rates were influenced by the cost of having the mortgage insured. There are lenders that will not differentiate between a deal at 95% LTV or 50% LTV. Some will not offer a different rate at 75%, only at 80% or 65%. So, there are cases where lender ABC has the best rate, for a deal at 75%, while lender XYZ would have the best rate, at 80%.

Nowadays, with so many brokers with an online presence and posting the lowest rates they have available, the rate you see posted online may be completely irrelevant to you. My advice : Always talk to a mortgage professional to see what options are available to you.
TheTechMan wrote:
Feb 13th, 2018 1:13 pm
Is there a reason why the rates wouldn't be just as good when putting 20% or more down?
Andre Oliveira - Mortgage Agent
FSCO # 10428 - Mortgage Intelligence
Newbie
Nov 27, 2014
2 posts
Dorval, QC
Hello brokers!

I'm in Montreal, QC. My mortgage is up for renewal on May 1st 2018.

Mortgage Amount: 290,000
Purchase Price (2013): 483,000
Remaining Amortization: 16.75 years
Family income: >130,000/yr, very good credit rating
Owner occupied
Mortgage is not insured

Please let me know rates for 5 year fixed and 5 year variable. I am looking for a traditional (non collateral) mortgage with options to make lump-sum payments during mortgage.

Thanks
Member
Mar 13, 2010
291 posts
22 upvotes
If any one know which TD specialist can match BMO 4 year 3.19% please share with me


Thanks
Deal Addict
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Dec 1, 2015
1651 posts
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Etobicoke, ON
You should be able to get a 5y fixed at 2.99% or a 5y variable at P-1.19%, with excellent pre payment flexibility and not a collateral charge.
GoHabsGo24 wrote:
Feb 13th, 2018 2:25 pm
Hello brokers!

I'm in Montreal, QC. My mortgage is up for renewal on May 1st 2018.

Mortgage Amount: 290,000
Purchase Price (2013): 483,000
Remaining Amortization: 16.75 years
Family income: >130,000/yr, very good credit rating
Owner occupied
Mortgage is not insured

Please let me know rates for 5 year fixed and 5 year variable. I am looking for a traditional (non collateral) mortgage with options to make lump-sum payments during mortgage.

Thanks
Andre Oliveira - Mortgage Agent
FSCO # 10428 - Mortgage Intelligence
Newbie
Apr 26, 2012
27 posts
8 upvotes
VERDUN
Can I get 2.99% for the rental property as indicated in post 42148?
Sr. Member
Sep 18, 2008
503 posts
82 upvotes
Woodbridge
If house closes on Jul 18th when would i start looking for a mortgage given builder does not delay the closing?
Deal Fanatic
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Feb 2, 2014
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Toronto
alienzed wrote:
Feb 13th, 2018 3:23 pm
Can I get 2.99% for the rental property as indicated in post 42148?
No, owner-occupied only.
Kevin Somnauth, CFA
Mortgage Agent and Real Estate Sales Representative
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Feb 2, 2014
5401 posts
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Toronto
erexa wrote:
Feb 13th, 2018 3:53 pm
If house closes on Jul 18th when would i start looking for a mortgage given builder does not delay the closing?
120 days before closing to get a competitive rate.
Kevin Somnauth, CFA
Mortgage Agent and Real Estate Sales Representative
Member
Jan 31, 2018
443 posts
63 upvotes
alienzed wrote:
Feb 13th, 2018 3:23 pm
Can I get 2.99% for the rental property as indicated in post 42148?
No owner occupied only

Best rental rates currently available are :

3.44% with 20% downpayment

3.39% with 25% downpayment

Hope this helps

Phil
Phil Cragg
Rateconnect
Broker License #12626
Jr. Member
Sep 12, 2007
158 posts
13 upvotes
Coquitlam
Just an update regarding my scenario:

295k home. first time home buyers
25 year amortization
downpayment: 35% (uninsured)
Credit/Employment: Very Good
Province: BC

Been quoted 3.14% with MCAP 5 year fixed or First National 5 year variable (2.50% prime-0.95). How much better of a rate can I get for the 5 year variable? I do question whether 5 years on a variable is more risk adverse than say a 3 year term..

I know I should be able to make my mind up on my own on whether to go variable vs. fixed. But what if there is a disparity of 0.64% ? Opinions?
Deal Addict
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Dec 1, 2015
1651 posts
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Etobicoke, ON
You can get 2.99% with Mcap.
akalic wrote:
Feb 13th, 2018 10:54 pm
Just an update regarding my scenario:

295k home. first time home buyers
25 year amortization
downpayment: 35% (uninsured)
Credit/Employment: Very Good
Province: BC

Been quoted 3.14% with MCAP 5 year fixed or First National 5 year variable (2.50% prime-0.95). How much better of a rate can I get for the 5 year variable? I do question whether 5 years on a variable is more risk adverse than say a 3 year term..

I know I should be able to make my mind up on my own on whether to go variable vs. fixed. But what if there is a disparity of 0.64% ? Opinions?
Andre Oliveira - Mortgage Agent
FSCO # 10428 - Mortgage Intelligence
Jr. Member
Sep 12, 2007
158 posts
13 upvotes
Coquitlam
valuemortgage wrote:
Feb 13th, 2018 11:29 pm
You can get 2.99% with Mcap.

Can I? Doesnt seem like the broker is budging. Tips?
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Sep 13, 2011
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Toronto
akalic wrote:
Feb 13th, 2018 11:38 pm
Can I? Doesnt seem like the broker is budging. Tips?
Yes. The best tip I can think of is switch brokers.
Paul Meredith
Mortgage Broker, Author
CityCan Financial Corp (lic. 10532)
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User avatar
Sep 13, 2011
3885 posts
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Toronto
akalic wrote:
Feb 13th, 2018 10:54 pm
Just an update regarding my scenario:

295k home. first time home buyers
25 year amortization
downpayment: 35% (uninsured)
Credit/Employment: Very Good
Province: BC

Been quoted 3.14% with MCAP 5 year fixed or First National 5 year variable (2.50% prime-0.95). How much better of a rate can I get for the 5 year variable? I do question whether 5 years on a variable is more risk adverse than say a 3 year term..

I know I should be able to make my mind up on my own on whether to go variable vs. fixed. But what if there is a disparity of 0.64% ? Opinions?
Let's say prime rate were to increase two times this year, bringing your spread then down to 0.14%. I'm not saying this will happen, but it's definitely possible. How much anxiety would this upward rate movement cause for you? As mentioned before, you need to feel comfortable with the possibility of the prime rate increasing, and potentially increasing to a point where you could end up paying more on the variable than where the fixed is today. This could end up happening. OR... prime could start to settle back down again over the next couple of years. Anything can happen here. If you are going to have trouble sleeping at night from the mere talk of rate increases, then perhaps fixed is a better choice for you. None of us have a crystal ball, therefore no one will be able to give you the correct answer. Only you know how you feel.

Another option would be to take the variable, but set the payment to equal that of the fixed. You're already prepared to make the higher payment of the 5 year fixed. Additional funds will go straight to your principal. You can then increase the payment a little more then next year, and then an little more the year after that. This way, you're hedging against rising rates. When rate does start to increase, you're already used to paying the higher payment and will have paid off a chunk of principal, so the higher rate will then be on a lower balance. This strategy can help remove some of the anxiety for you and is a great option for many.
Paul Meredith
Mortgage Broker, Author
CityCan Financial Corp (lic. 10532)
Sr. Member
Sep 18, 2008
503 posts
82 upvotes
Woodbridge
CdnRealEstateGuy wrote:
Feb 13th, 2018 4:06 pm
120 days before closing to get a competitive rate.
Called builder, they said decision on my lot being delayed or not will be made next month, So if I don't get a notice or anything by mid March I will start shopping around. I am inclined to go with variable though. My guess is with 20-25% down I won't get P-1.1 or something.

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