Real Estate

The Official Mortgage Rates Thread

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Sep 13, 2011
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JayLove06 wrote: Go with who you feel comfortable with. Whether it be a bank or credit union. IMO, if you're not going to sleep well by going with a broker, then is saving $30/month worth it?
I think the original poster was talking about one specific brokerage, not brokers in general.
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JayLove06 wrote: What are thoughts of going variable for a year or 2 and then jumping into a fixed rate? Does that make financial sense or is it best to just go fixed from the get go?
It doesn't make much sense to go variable then convert to fixed. If you want fixed then go fixed from the get go.
JayLove06 wrote: My problem is I have no idea when rates are going to rise and by how much.
It's not your problem, but everybody's.
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JayLove06 wrote: You're right. I guess my point was you can't put a dollar value on peace of mind.

I have a question myself. What are thoughts of going variable for a year or 2 and then jumping into a fixed rate? Does that make financial sense or is it best to just go fixed from the get go? My problem is I have no idea when rates are going to rise and by how much.
I completely agree that you can't put a dollar value on peace of mind, which also is completely relevant to your question on fixed vs. variable. Whether to go fixed vs. variable is a very personal decision, and there is no question you may come out further ahead with variable. This was typically the case in the past, and we are in a bit of a different time now. This doesn't mean variable isn't good or that i'm suggesting one over the other. Prime rate hasn't increased since 2010. We had a very unexpected drop late January and some economists are predicting it will drop again early March.

Will prime rate eventually start to go up? Of course it will. But nobody really knows when this will happen. Unlikely it will happen anytime soon. Economists have been predicting that it will go up 'next year' every year for the pats 5 years and look what happened? It dropped. It could be years before we see it stabilize to regular levels, however everything is speculation and anything can happen.

Right now, you can get a 5 year fixed is between as low as 2.44%. The lowest available 5 year variable is prime -0.90% (1.95%), a difference of 0.49%. The Bank of Canada would have to increase the prime rate twice (at 1/4 % each time) for the variable rate to match the fixed in this example. While we most likely won't see any increases to prime for a couple of years (anything can happen either way), when it does increase there is nothing to say that it won't increase quickly. In 2010 we saw it increase 0.75% in just a few months.

Will you come out ahead with a variable rate vs. a 5 year fixed rate at the end of 5 years? No one can tell you for sure. Why I suggest for my clients really comes down to their risk threshold. Do you feel comfortable knowing that your rate and payment can increase? Or do you prefer the security of knowing you have a super low mortgage rate for the next 5 years guaranteed? The answer to that question should be the deciding factor on your decision. As you say... you can't put a price on peace of mind.

About the discussion on brokers, as I mentioned, I believe that poster was referring to an individual brokerage. Who you choose to arrange your mortgage for you is just as important a getting a good rate.... if not more so. It's great to get a good deal, but you also want to ensure you are dealing with someone who is knowledgable, ethical, competent and relatively easy to get ahold of. This is regardless of whether you choose to deal with someone at your bank or a broker. You can have a great experience dealing with either side or you can have a nightmare experience dealing with either side. Don't assume you will be well taken care of by the person at your bank or by the first broker you talk to. If you choose to go with a bank, then thats fine... but make sure the person you are dealing with there knows what they are doing and will make sure you are well taken care of.
Paul Meredith
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Looking for a mortgage. Prime - 0.9 or 2.44 Fixed. Will put 20 down.

If you're a broker who can offer this rate please PM me with details and features that your brokerage offers. Mainly interested on details for prepayment terms.

Thanks.

EDIT: Looking to deal with someone in person in the GTA
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tommystery wrote: Looking for a mortgage. Prime - 0.9 or 2.44 Fixed. Will put 20 down.

If you're a broker who can offer this rate please PM me with details and features that your brokerage offers. Mainly interested on details for prepayment terms.

Thanks.

EDIT: Looking to deal with someone in person in the GTA
Definitely a great time to be shopping for a mortgage. I'll shoot you a PM with some details.
Paul Meredith
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Where in the GTA are you located?
tommystery wrote: Looking for a mortgage. Prime - 0.9 or 2.44 Fixed. Will put 20 down.

If you're a broker who can offer this rate please PM me with details and features that your brokerage offers. Mainly interested on details for prepayment terms.

Thanks.

EDIT: Looking to deal with someone in person in the GTA
Kevin Somnauth, CFA
Principal Broker - First Toronto Mortgage - MA (Ontario #13176, BC #X301007)
Real Estate Salesperson - Century 21 Innovative
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geotuna wrote: It doesn't make much sense to go variable then convert to fixed. If you want fixed then go fixed from the get go.
It makes sense if rates go up obviously. But I get your point. Your ahead of the game with variable....

Here's an example..and why I'm considering variable. I've always gone with fixed rates. A family member and I each bought a property. We both went with variable. Me, being the pussycat that I was ended up switching to fixed when rates had crept up for a 2nd time and there were rumblings that they were going to go up again. Family member didn't. Fast forward 5+ years, I'm still paying this crappy 3.69% fixed interest rate and she is paying much lower than that. Had a talk with her the other day and she was laughing at me. LOL.

The moral of the story is...if you are a pussycat, stick with fixed. If you're less of a worrier, then go variable.
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PaulMeredith wrote: I completely agree that you can't put a dollar value on peace of mind, which also is completely relevant to your question on fixed vs. variable. Whether to go fixed vs. variable is a very personal decision, and there is no question you may come out further ahead with variable. This was typically the case in the past, and we are in a bit of a different time now. This doesn't mean variable isn't good or that i'm suggesting one over the other. Prime rate hasn't increased since 2010. We had a very unexpected drop late January and some economists are predicting it will drop again early March.

Will prime rate eventually start to go up? Of course it will. But nobody really knows when this will happen. Unlikely it will happen anytime soon. Economists have been predicting that it will go up 'next year' every year for the pats 5 years and look what happened? It dropped. It could be years before we see it stabilize to regular levels, however everything is speculation and anything can happen.

Right now, you can get a 5 year fixed is between as low as 2.44%. The lowest available 5 year variable is prime -0.90% (1.95%), a difference of 0.49%. The Bank of Canada would have to increase the prime rate twice (at 1/4 % each time) for the variable rate to match the fixed in this example. While we most likely won't see any increases to prime for a couple of years (anything can happen either way), when it does increase there is nothing to say that it won't increase quickly. In 2010 we saw it increase 0.75% in just a few months.

Will you come out ahead with a variable rate vs. a 5 year fixed rate at the end of 5 years? No one can tell you for sure. Why I suggest for my clients really comes down to their risk threshold. Do you feel comfortable knowing that your rate and payment can increase? Or do you prefer the security of knowing you have a super low mortgage rate for the next 5 years guaranteed? The answer to that question should be the deciding factor on your decision. As you say... you can't put a price on peace of mind.

About the discussion on brokers, as I mentioned, I believe that poster was referring to an individual brokerage. Who you choose to arrange your mortgage for you is just as important a getting a good rate.... if not more so. It's great to get a good deal, but you also want to ensure you are dealing with someone who is knowledgable, ethical, competent and relatively easy to get ahold of. This is regardless of whether you choose to deal with someone at your bank or a broker. You can have a great experience dealing with either side or you can have a nightmare experience dealing with either side. Don't assume you will be well taken care of by the person at your bank or by the first broker you talk to. If you choose to go with a bank, then thats fine... but make sure the person you are dealing with there knows what they are doing and will make sure you are well taken care of.
Agreed. Especially the bit about who is putting the mortgage together. I find a number of banks I come across have unknowledgeable people working on deals. And I don't mean that they're dumb, but they don't specialize in mortgages. Financial Advisers, Customer Service Reps, etc doing mortgages. Obviously some of them are just putting numbers into the system but for those people who think the bank will know what they're doing and not screw up deals? Nope. Not necessarily. A broker or mobile mortgage agent IMO are the ones you have to go with. The people who work on commission. Not salaried employees who specialize in say...mutual funds who will get paid whether you go with them or not. LOL.
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Mar 16, 2008
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What's the best 5 yr variable with National Bank these days?
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Mar 5, 2006
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Looking for a few options - however I understand I'm a bit too early.

Current fixed term is due for renewal September 27, 2015. Current rate is 3.64 and have 220k remaining on my 254k mortgage. Feel free to PM me, not set on renewing with Scotia.
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JayLove06 wrote: Agreed. Especially the bit about who is putting the mortgage together. I find a number of banks I come across have unknowledgeable people working on deals. And I don't mean that they're dumb, but they don't specialize in mortgages. Financial Advisers, Customer Service Reps, etc doing mortgages. Obviously some of them are just putting numbers into the system but for those people who think the bank will know what they're doing and not screw up deals? Nope. Not necessarily. A broker or mobile mortgage agent IMO are the ones you have to go with. The people who work on commission. Not salaried employees who specialize in say...mutual funds who will get paid whether you go with them or not. LOL.
+1 you can say that again!

I was signing a mortgage at RBC some years ago. I noticed that, in the contract, the formula for the IRD calculation was actually missing a mathematical symbol! :-0 I told the guy that it should be a minus sign in there (versus a blank space) and I asked him to write it in and initial that page. Him: "I'm not actually sure about what should be in this contract..." :facepalm: I eventually convinced him to write in the minus sign and we both initialed that spot.
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Simkins wrote: Looking for a few options - however I understand I'm a bit too early.

Current fixed term is due for renewal September 27, 2015. Current rate is 3.64 and have 220k remaining on my 254k mortgage. Feel free to PM me, not set on renewing with Scotia.
Maximum rate hold for a switch is 90 days, and as you say, you are too early. So you are options are as follows:

1- sign for a ridiculous rate right now with your bank

2- wait until the 90 day mark
Paul Meredith
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We are looking at a cash back renewal mortgage to pay off some higher interest debt, also rolling a car loan into the renewal.

CIBC is offering the following 5 year term variable rates;

3% cash back at prime
2% cash back at prime -0.2
1% cash back at prime -0.4

Is there anywhere else we can look for better numbers?

THANKS
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Feegus wrote: We are looking at a cash back renewal mortgage to pay off some higher interest debt, also rolling a car loan into the renewal.

CIBC is offering the following 5 year term variable rates;

3% cash back at prime
2% cash back at prime -0.2
1% cash back at prime -0.4

Is there anywhere else we can look for better numbers?

THANKS
Why not just build the debt you need to pay off into the new mortgage rather than getting a cash back? This way you can get a variable for prime -0.90%.

CIBC is ALWAYS pushing these cash back mortgages because they are so profitable for them. If for some reason you find yourself in a position where you need to break your mortgage mid-term, you will need to pay back 100% of your cash back to CIBC plus penalty and discharge fees. You will have paid all that additional interest for nothing. You may not think you will need to break your mortgage, but it happens all the time. You never know where the future might take you or what unforeseen obstacles you might face.
Paul Meredith
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Jun 6, 2006
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I have a few questions about mortgage strategy. Let's say I buy a $400,000 house with $300,000 mortgage, amortization 10 years, and I want to pay the mortgage between 6-7 years. What is the best combo of mortgage terms to pay up the mortgage without the paying early penalty (5+2?)? Let's say I only have $50,000 to pay on my mortgage after my first 5 years term, how can I pay the remaining $50,000 without taking a five years term?

Thanks for your help!

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