Real Estate

Mortgage term advice

  • Last Updated:
  • Feb 23rd, 2018 3:06 pm
[OP]
Newbie
Feb 21, 2018
70 posts
32 upvotes

Mortgage term advice

I am getting a mortgage from a lender that does not follow the new stress test and these are my only options right now.

1 year 4.57% with $4940 lender fee (1% of the mortgage amount)
2 years 4.74% with $1000 lender fee
3 years 4.94% with $1000 lender fee
Amortization 30 years

It looks like 2 years option is the best among the other 2 options. Do you guys think rate will go up much higher than 4.94% 3 years from now? I understand that these rates are awfully high compare to the normal rates, but keep it mind for our situation we will need to go with a lender that does not follow the new stress test. Therefore, they are charging premium and we are okay for short term until our situation change in the next a couple of years or so. Please provide advice based on what we have provided above.

Thank you for your help.
7 replies
Deal Fanatic
User avatar
Feb 2, 2014
8965 posts
2567 upvotes
Toronto
With no stress test, you can do way better than that. Rates start at 3.29% 5-year fixed no broker or lender fees.
Kevin Somnauth, CFA
Principal Broker - First Toronto Mortgage - MA (Ontario #13176, BC #X301007)
Real Estate Salesperson - Century 21 Innovative
Newbie
Feb 2, 2018
42 posts
20 upvotes
Go for the 3 year option, it is only a 0.20% difference over a 1 year time gap.

In my opinion it is the best one.
Newbie
Feb 2, 2018
42 posts
20 upvotes
CdnRealEstateGuy wrote: With no stress test, you can do way better than that. Rates start at 3.29% 5-year fixed no broker or lender fees.
Not to be rude or anything, but I don't think that was his question. In fact he underlined the word "only" so he doesn't have to see replies such as yours.
Deal Fanatic
User avatar
Feb 2, 2014
8965 posts
2567 upvotes
Toronto
Takanome wrote: Not to be rude or anything, but I don't think that was his question. In fact he underlined the word "only" so he doesn't have to see replies such as yours.
All good @takanome, no offense taken.

He also said "no stress test" which gives me the impression he is going to B lenders because of the new stress test rules. It's very possible those AREN'T his "only" options.

I posted because OP may be paying a much higher interest rate and fees which he doesn't have to.
Kevin Somnauth, CFA
Principal Broker - First Toronto Mortgage - MA (Ontario #13176, BC #X301007)
Real Estate Salesperson - Century 21 Innovative
Newbie
Feb 2, 2018
42 posts
20 upvotes
CdnRealEstateGuy wrote: All good @takanome, no offense taken.

He also said "no stress test" which gives me the impression he is going to B lenders because of the new stress test rules. It's very possible those AREN'T his "only" options.

I posted because OP may be paying a much higher interest rate and fees which he doesn't have to.
Good point, that is indeed another thing OP needs to evaluate.
[OP]
Newbie
Feb 21, 2018
70 posts
32 upvotes
Well other than no stress test, there is a another exception that my broker had to find a B lender to agree to waive it. I trusted him that he had approached few of them and only one agreed to waive it. Hence, they are the only options available.

If I compare them side by side, going with the 2 years and then renew to 1 year term if I need to stay with the same lender is cheaper option (assuming the interest stay the same in the next 3 years or better).
Deal Addict
Jan 15, 2017
4108 posts
3611 upvotes
If the lender is charging a fee, is your broker also?

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