Real Estate

The Official Mortgage Rates Thread

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Sep 13, 2011
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ace604 wrote: So what happens if you used to have a high-ratio mortgage, say 15% down, and now upon renewal/switch/transfer time you are at 25% "down" (equity on original purchase price, ignoring any property increase even!).

Does your initial CMHC insurance remain valid, and wouldn't that fact make you qualify for the "high-ratio mortgages only" specials?

or no?

you can't have to re-insure every time you switch ... CAN YOU? do you have to reinsure for a "refinance" where you're not actually borrowing any more money??

I think your insurance remains valid for the original declining balance until the end of the original amortization, no? ... so the lenders shouldn't care if you are high-ratio or not, they should just care if they have to pay insurance or not.
Yes, if your original mortgage was insured, you will still be able to qualify for the high ratio promos when switching.
Paul Meredith
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PaulMeredith wrote: Yes, if your original mortgage was insured, you will still be able to qualify for the high ratio promos when switching.
We started with 20% down to avoid CMHC costs.

Is there any way to tell if any of our various lenders along the way have added insurance? Or does that not matter -- is lender-purchased insurance portable in the same way as if we had paid CMHC day 1?

I believe something with respect to this is what excluded us from a promo rate several years back (maybe with IA?). Was with RMG at that time. Started with Scotia initially. Since RMG we've been through LL and MCAP (started with 20% down and never added funds, so insurance costs never incurred /directly/ by us anyways).

IIRC, the broker assumed we qualified for the promo based on his assumption that RMG insured ALL their mortgages, but we couldn't get the rate because we were NOT high ratio.

So I never found out if RMG had insured our mortgage and the other lender still didn't qualify us for the promo (IA I think?) or if for some reason RMG had NOT insured our mortgage.

EDIT: was First National not IA. Found the 3 year old info ...
"first national. They are unable to apply this product to your transfer as it is conventional. Their product info sheet said that this product was good for insured deals only, or insurable deals. I knew your mortgage was conventional, but since you would have had bulk insurance at RMG I figured this would fit you into the umbrella. Unfortunately it does not."

So really my only question is ... does that RMG insurance mentioned carry forwards with our mortgage now or not?
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ace604 wrote: We started with 20% down to avoid CMHC costs.

Is there any way to tell if any of our various lenders along the way have added insurance? Or does that not matter -- is lender-purchased insurance portable in the same way as if we had paid CMHC day 1?

I believe something with respect to this is what excluded is from a promo rate several years back (maybe with IA?).
Was with RMG at that time. Started with Scotia initially. Since RMG we've been through LL and MCAP.
(started with 20% down and never added funds, so insurance costs never incurred /directly/ by us anyways).
If you started with 20% down originally then you wouldn't qualify for it, since your mortgage was conventional. Your original mortgage would have had to have have been high ratio, which it wasn't. It doesn't matter if it was insured by the lender 'behind the scenes' unfortunately.

In MOST cases, the rate is the same for both conventional and high ratio mortgages. It's just 'some' rate specials where there is a better break on high ratio mortgages. You can still get a 5 year fixed for 2.39% on a conventional mortgage (or a purchase with 20% down), however the minimum penalty to break that mortgage is 3% of the mortgage amount. For the standard penalty, the rate would be 2.44%. On high ratio, it would be 2.39% with the standard penalty (that is, the penalty if you found yourself in a position where you need to break early).
Paul Meredith
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(lic. 10532)
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PaulMeredith wrote: If you started with 20% down originally then you wouldn't qualify for it, since your mortgage was conventional. Your original mortgage would have had to have have been high ratio, which it wasn't. It doesn't matter if it was insured by the lender 'behind the scenes' unfortunately.

In MOST cases, the rate is the same for both conventional and high ratio mortgages. It's just 'some' rate specials where there is a better break on high ratio mortgages. You can still get a 5 year fixed for 2.39% on a conventional mortgage (or a purchase with 20% down), however the minimum penalty to break that mortgage is 3% of the mortgage amount. For the standard penalty, the rate would be 2.44%. On high ratio, it would be 2.39% with the standard penalty (that is, the penalty if you found yourself in a position where you need to break early).
Thanks for the reply. I posted an EDIT right as you posted in case that info matters.
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Newbie
Apr 18, 2016
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I up for renewal for a mortgage. It's disappointing to see that rates are so much higher than 5 years ago, even if prime has not changed. Anyway, my question is about Canwise: they advertise these rates so much lower than current offer by most/all banks, like 2.05% for a variable rate mortgage with a 5 year term. What's the catch? Is there anything that I'm missing?
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Feb 2, 2014
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mar765 wrote: What happens if at the end of the term the value of the mortgage is zero? Do you still need to pay the collateral fee?

Thanks.
Mar
You just need to pay the discharge fee.

Also, there is no such thing as a "collateral fee". If you wanted to switch lenders (which you don't), the new lender would not cover the legal and appraisal costs because you have a collateral charge. It will basically be treated as a refinance and not a free transfer.
Kevin Somnauth, CFA
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Real Estate Salesperson - Century 21 Innovative
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Apr 26, 2004
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Just want to update everyone on some new rate promos. 4 year at 2.39% on a 45 day close with a major bank and this promo includes cash back dependent on the size of the mortgage.
Mortgage Specialist in the GTA
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Feb 17, 2009
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Edmonton
Hi guys, need some advice for my mom who recently got her hours cut from full time to 16 hrs/week and will struggle to meet mortgage payments.

Current mortgage with TD Home Equity FlexLine (I think that's what it's called).
Total borrowed is 175k
Fixed portion of that is 133k at 2.99% with 2 years left on the term
Rest is home equity line at prime plus whatever but unused
Townhouse in greater Vancouver worth 417k

She called TD last week and they mentioned she could make interest only payments as a relief option but today when she went to the branch to set that up, they said she was misinformed and she would have to pay the $3500ish penalty to break it and then they could set her up with interest only payments.

Can anyone please suggest if it's worth her breaking and re-financing or have any other ideas to help?
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fshamji wrote: Hi guys, need some advice for my mom who recently got her hours cut from full time to 16 hrs/week and will struggle to meet mortgage payments.

Current mortgage with TD Home Equity FlexLine (I think that's what it's called).
Total borrowed is 175k
Fixed portion of that is 133k at 2.99% with 2 years left on the term
Rest is home equity line at prime plus whatever but unused
Townhouse in greater Vancouver worth 417k

She called TD last week and they mentioned she could make interest only payments as a relief option but today when she went to the branch to set that up, they said she was misinformed and she would have to pay the $3500ish penalty to break it and then they could set her up with interest only payments.

Can anyone please suggest if it's worth her breaking and re-financing or have any other ideas to help?
To be clear, total borrowed is $133k and there is $0 of the remaining $42k LoC used? ... NOT $175k borrowed?

If it is anticipated to be a short-term setback, you can use LoC funds to makeup shortfall in monthly budget.

If it's going to be a long-term setback, you need to figure out something more permanent than making interest-only payments for some interim period, right?
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ace604 wrote: To be clear, total borrowed is $133k and there is $0 of the remaining $42k LoC used? ... NOT $175k borrowed?

If it is anticipated to be a short-term setback, you can use LoC funds to makeup shortfall in monthly budget.

If it's going to be a long-term setback, you need to figure out something more permanent than making interest-only payments for some interim period, right?
Correct $133k borrowed and $0 LoC

It's long term, it was either lay off or take 2 days/week. Correct on needing to figure out something long term.
Newbie
Jan 8, 2016
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Mississauga
Hello Fellow RFDers, I recently purchased a home and on the market for better mortgage rates. I got pre-approved from one of the 5 banks and when I try to get the confirmation, they insisted to me to go for 5 year fixed as opposed to my initial plan of 2 year fixed(2.5 % vs 2.1). The bank was saying that CMHC is making the decision to go for 5 years since they are the insurers and even if I shop around, I will get the same response. I am making 10 % down payment for 500K. My only reason is to for 2 years is save additional interest amount since the longer the term, the more amount will go towards the interest. I also heard that the agents get more commission if they are able secure the 5 year term. I know a lot of the mortgage agents are providing valuable information in the forum and by all means I am not saying anything negative about the commission. Now the question is whether I will go with 5 year fixed or continue shop around for a better rate. Appreciate your response.
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fshamji wrote: Correct $133k borrowed and $0 LoC

It's long term, it was either lay off or take 2 days/week. Correct on needing to figure out something long term.
IMO (not a broker or anything), I don't think you should be paying any fees like $3500 to break anything.

Paying from LoC to mortgage may seem silly, but if the end goal is to sell in X months, then you aren't losing much.

e.g. $133k @ 2.99% with 22-yr remaining ... 2-yr term remaining: $687/mo payment.
Roughly 50/50 interest/principal being paid... switching to interest only "saves" you 1/2 the payment.

If 1/2 the payment is enough to make the difference in surviving on the budget, then take that 1/2 from the LoC instead.

You are still paying interest only, no principal is being paid down -- you are slowly shifting some principal from the mortgage to the LoC.

So sure, you'll pay a higher rate on the LoC, but if it's only for a few months/years it's not a big difference. If the LoC is at Prime + 1% even, you are paying 3.7% on maybe an average LoC balance of $4k for the full 2 years (start at $0, end with ~$8k balance).

3.7 - 2.99 = 0.71% extra ... x $4k average balance x 2 years = $56.80

... for just over $50, she can pay 1/2 her payments from the LoC every month and end up with the same principal in 2 years as she has today (i.e. make interest-only payments for 2 years).
POLL: How frequent is your RRSP-matching?
Plastiq: Pay any bill with credit card for 0-2.5% fee (help meet min spending and keep old cards active!)
Rewards program transfer times (e.g. SPG->Aeroplan, Marriott->SPG, Amex MR->SPG...)
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Mar 1, 2014
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B2redflag wrote: Hello Fellow RFDers, I recently purchased a home and on the market for better mortgage rates. I got pre-approved from one of the 5 banks and when I try to get the confirmation, they insisted to me to go for 5 year fixed as opposed to my initial plan of 2 year fixed(2.5 % vs 2.1). The bank was saying that CMHC is making the decision to go for 5 years since they are the insurers and even if I shop around, I will get the same response. I am making 10 % down payment for 500K. My only reason is to for 2 years is save additional interest amount since the longer the term, the more amount will go towards the interest. I also heard that the agents get more commission if they are able secure the 5 year term. I know a lot of the mortgage agents are providing valuable information in the forum and by all means I am not saying anything negative about the commission. Now the question is whether I will go with 5 year fixed or continue shop around for a better rate. Appreciate your response.
Sometimes the borrower has to take a 5-yr fixed to qualify for the mortgage amount required, because shorter fixed terms and variable terms must use the 4.64% benchmark rate to qualify. Not sure if this is a factor in your case, because there is no detailed background information provided except for the 10% down payment.
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Oct 7, 2011
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Toronto
Closing at the end of June and shopping around for rates. What is the lowest on 5 yr fixed right now with 20% down? I've seen a few people say 2.44 but my agent said 2.39. Also wondering if 5-fixed is the way to go or if there is something else you guys might suggest. We also need to do some work on the house (roof, A/C, basement, etc.) and how you recommend we pay for this? Can we lump the cost into the mortgage? Should we go as much as possible up front?

Thanks!
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Sep 13, 2011
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B2redflag wrote: Hello Fellow RFDers, I recently purchased a home and on the market for better mortgage rates. I got pre-approved from one of the 5 banks and when I try to get the confirmation, they insisted to me to go for 5 year fixed as opposed to my initial plan of 2 year fixed(2.5 % vs 2.1). The bank was saying that CMHC is making the decision to go for 5 years since they are the insurers and even if I shop around, I will get the same response. I am making 10 % down payment for 500K. My only reason is to for 2 years is save additional interest amount since the longer the term, the more amount will go towards the interest. I also heard that the agents get more commission if they are able secure the 5 year term. I know a lot of the mortgage agents are providing valuable information in the forum and by all means I am not saying anything negative about the commission. Now the question is whether I will go with 5 year fixed or continue shop around for a better rate. Appreciate your response.
It's possible that you may not qualify for anything other than a 5 year fixed, which is a common situation. With a 5 year fixed mortgage, debt service is calculated using the contract rate (the rate your payments are based on). With variable or terms shorter than 5 years, debt service is calculated using the benchmark rate set by the Bank of Canada, which is currently 4.64%. This means, you'll qualify for a substantially smaller mortgage if you are choosing a shorter term or variable rate mortgage. This is likely the case.

What rate is the bank quoting you on the 5 year fixed? Through a broker, you can get a 5 year fixed through a major bank for 2.49%. You can get as low as 2.39% through non-bank lenders.
Paul Meredith
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leafsfan85 wrote: Closing at the end of June and shopping around for rates. What is the lowest on 5 yr fixed right now with 20% down? I've seen a few people say 2.44 but my agent said 2.39. Also wondering if 5-fixed is the way to go or if there is something else you guys might suggest. We also need to do some work on the house (roof, A/C, basement, etc.) and how you recommend we pay for this? Can we lump the cost into the mortgage? Should we go as much as possible up front?

Thanks!
You can get as low as 2.39% on a 5 year fixed with 20% down, however the penalty to break the mortgage at this rate is a minimum 3% of the mortgage amount. For the standard 'higher of 3 months interest or the interest rate differential' penalty, the lowest rate is 2.44%.

There are lower rates out there with 3 year fixed rates as low as 2.14%, however whether this is the better choice or not really comes down to the individual borrower. Some people don't mind taking a chance in going with a shorter term in order to capitalize on the savings from a lower rate. Others prefer the comfort and peace of mind of having a rate locked in for longer, as you would have with a 5 year fixed. It really depends on what you feel most comfortable with and there is no wrong answer here (unless you have a crystal ball to predict the future).

Regarding the renos, you can get a purchase plus improvements mortgage, which will allow you to include the costs of the needed renos into the mortgage. Maximum is $40,000 and all you would need to do is provide a contractor quote for the work needed prior to closing.
Paul Meredith
Mortgage Broker, Author - CityCan Financial Corp
(lic. 10532)
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Mar 1, 2014
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leafsfan85 wrote: Closing at the end of June and shopping around for rates. What is the lowest on 5 yr fixed right now with 20% down? I've seen a few people say 2.44 but my agent said 2.39. Also wondering if 5-fixed is the way to go or if there is something else you guys might suggest. We also need to do some work on the house (roof, A/C, basement, etc.) and how you recommend we pay for this? Can we lump the cost into the mortgage? Should we go as much as possible up front?

Thanks!
The 2.44% provides standard features, while the 2.39% has a 3% penalty if you break the mortgage. You have to decide whether the small discount is worth the risk.
Newbie
Sep 18, 2003
11 posts
Edmonton
Just signed an offer to build a house with a builder in Edmonton. They recommend ATB, BMO, CIBC, RBC or TD for a draw mortgage and will cover the inspections and interest costs up until the closing date. Are there any deals to be had? I could go with another lender, but am responsible for all additional legal fees for work above their typical mortgage transaction plus a $500.00 fee.

I'm looking for decent flexibility, and possibly variable rate with the option to lock in.

Looking to put down 20% on 600k.

Any advice would be great!
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Feb 17, 2009
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Edmonton
ace604 wrote: IMO (not a broker or anything), I don't think you should be paying any fees like $3500 to break anything.

Paying from LoC to mortgage may seem silly, but if the end goal is to sell in X months, then you aren't losing much.

e.g. $133k @ 2.99% with 22-yr remaining ... 2-yr term remaining: $687/mo payment.
Roughly 50/50 interest/principal being paid... switching to interest only "saves" you 1/2 the payment.

If 1/2 the payment is enough to make the difference in surviving on the budget, then take that 1/2 from the LoC instead.

You are still paying interest only, no principal is being paid down -- you are slowly shifting some principal from the mortgage to the LoC.

So sure, you'll pay a higher rate on the LoC, but if it's only for a few months/years it's not a big difference. If the LoC is at Prime + 1% even, you are paying 3.7% on maybe an average LoC balance of $4k for the full 2 years (start at $0, end with ~$8k balance).

3.7 - 2.99 = 0.71% extra ... x $4k average balance x 2 years = $56.80

... for just over $50, she can pay 1/2 her payments from the LoC every month and end up with the same principal in 2 years as she has today (i.e. make interest-only payments for 2 years).
Thanks, that's not a bad idea. Will discuss with her and let you know what she thinks. Anyone else have any other ideas?
Jr. Member
Jan 18, 2016
122 posts
9 upvotes
Toronto, ON
Anyone get a mortgage with CIBC recently? Looking for the best possible rates for the following:

1 Year Fixed
2 Year Fixed
3 Year Fixed
1 Year Open
3 Year Variable
5 Year Variable

I might be selling my place within the next 6 months, and trying to determine what is the best route to go to pay the minimal / no penalties.

Thanks

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