Real Estate

The Official Mortgage Rates Thread

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May 1, 2017
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Daytonahemi wrote: What are the current refinancing rates available? Currently have 359k $ left to go and 20 yrs remaining

Any brokers on here deal in the Edmonton area?
Hi there,

Are you looking to refinance, or switch at maturity? The rates are drastically different depending on the transaction type. A refinance is when you're looking to increase the mortgage balance to access equity (for investment, debt consolidation, renovations, etc) or if you need to extend the amortization to reduce you monthly payments.

A switch/transfer is when you're simply transferring the mortgage balance to a new lender at maturity (or not at maturity) dollar for dollar, keeping the amortization the same or reducing it, to take advantage of lower rate offerings.

The rates vary greatly between the two transactions as refinances are no longer considered insurable by mortgage default insurers, whereas switch/transfers are. Insurable mortgages are eligible for much better rates than uninsurable mortgages.

The best refinance rates would be around 3.29%-3.39% 5 years fixed, and prime minus 0.70% variable, whereas the best switch transfer rates could be under 3% 5 years fixed, and prime minus 1.24% variable, depending on the specifics of your mortgage and qualifying.

Rates for switches are dependant on a number of variables. In order to know what rates would be available for a switch, we would need to know the following at a minimum:
- Current approximate property value
- property type
- maturity date
- is the mortgage currenty insured or uninsured (did you originally have more, less, or exactly 20% down when you purchased?)
- current mortgage lender and type of charge
- some income qualifying info

Any of the regular posting brokers/agents on this forum should be able to assist you as most brokerages are licensed nationwide!

Best,

Connor
Last edited by GreenMortgages on Feb 14th, 2018 2:09 pm, edited 1 time in total.
_________________________________
Connor Green
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Concierge Mortgage Group
#12179
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Woodbridge
CdnRealEstateGuy wrote: With 25% down, you can get Prime -1.00% or 2.99% 5-year fixed.
We may end up selling this place in 2-3 years. I would still think variable is a better choice than locking ourselves.
Newbie
May 3, 2013
25 posts
Ontario
This explains very well why the LTV affects the rate.
How does the house value affect the cost? and why?
The lender is insuring the mortgage not the entire house value.

Thanks

valuemortgage wrote: 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.
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slahaz wrote: This explains very well why the LTV affects the rate.
How does the house value affect the cost? and why?
The lender is insuring the mortgage not the entire house value.

Thanks
Essentially the insurance policies are cheaper at lower loan-to-values as the loss-risk associated with the mortgage is lower. If borrowers default on their mortgages it will be easier to recoup the mortgage balance from the sale of the property when there is more equity in the property. There is less risk that the insurer will be unable to recoup the full mortgage balance + fees associated.

That was a great explanation that Andre and Paul provided describing the modern pricing.

Connor
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Connor Green
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I am still not able to understand why a house that is valued over 1 Million would have a higher rate or higher risk even if the LTV is lower.

a. Home A valued at 1.2Million LTV 30%
b. Home B valued at 900k LTV 75%


GreenMortgages wrote: Essentially the insurance policies are cheaper at lower loan-to-values as the loss-risk associated with the mortgage is lower. If borrowers default on their mortgages it will be easier to recoup the mortgage balance from the sale of the property when there is more equity in the property. There is less risk that the insurer will be unable to recoup the full mortgage balance + fees associated.

That was a great explanation that Andre and Paul provided describing the modern pricing.

Connor
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slahaz wrote: I am still not able to understand why a house that is valued over 1 Million would have a higher rate or higher risk even if the LTV is lower.

a. Home A valued at 1.2Million LTV 30%
b. Home B valued at 900k LTV 75%
Oh I see what you mean - properties over $1m! There is some debate on the reasoning for which insurers won't insure properties valued over $1m. Basically it boils down to the the government/insurers reducing their exposure to these property price ranges but more-so because the government felt that borrowers were taking advantage of a program build to assist people with low savings to be able to purchase a property to become home owners. The intention of the program was never to help people buy $1m houses with 5% - 19.99% down. It's less of a risk pricing issue in this scenario and more of a reaction to the perceived misappropriation of the original intentions of the program. The ceiling of $1,000,000 is more or less arbitrary. Now, the lack of available insurance for these types of properties has led to lenders only being able to lend on these properties when they have funds that are not earmarked for bulk insurance. Most lenders do not have allocated funds for uninsured use, and the funds they do have available require a larger rate of return.

Connor
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Connor Green
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Concierge Mortgage Group
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Hey brokers ,

Bought a new house and was wondering what kind of rates are currently available.

Purchase price - 607k
Down payment - 210k
Annual income - 58 k aprx yearly income
Great credit rating. No other debts.

Thx in advance.
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sdanny wrote: Hey brokers ,

Bought a new house and was wondering what kind of rates are currently available.

Purchase price - 607k
Down payment - 210k
Annual income - 58 k aprx yearly income
Great credit rating. No other debts.

Thx in advance.
Hi there,

It's going to be difficult to get qualified for a $397,000 mortgage with $58,000 in income as qualifying has gotten tighter as of recent. Did you have a pre-approval before purchasing? If so what amount were you pre-approved for and which institution is it with?

Best,

Connor
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Connor Green
Mortgage Awards of Excellence Winner
Concierge Mortgage Group
#12179
Jr. Member
Oct 31, 2012
187 posts
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Toronto
GreenMortgages wrote: Hi there,

It's going to be difficult to get qualified for a $397,000 mortgage with $58,000 in income as qualifying has gotten tighter as of recent. Did you have a pre-approval before purchasing? If so what amount were you pre-approved for and which institution is it with?

Best,

Connor
Do have a pre approval with TD n Scotiabank for 375k was looking for a bttr rate n around 390k mortgage.
Thx
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sdanny wrote: Do have a pre approval with TD n Scotiabank for 375k was looking for a bttr rate n around 390k mortgage.
Thx
I would first check to see if Scotiabank and TD will honour the pre-approvals if they were obtained prior to Jan 1 as regulations changed and some pre-approvals were rendered null and void. TD was honouring the old pre-approvals at the old guidelines last I heard, though.

Given the information that you've provided, the rates available to you more than likely won't be attractive as you stretched fairly thin qualifying-wise. Probably around 3.69% if you can get qualified.
_________________________________
Connor Green
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#12179
Jr. Member
Oct 31, 2012
187 posts
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Toronto
GreenMortgages wrote: I would first check to see if Scotiabank and TD will honour the pre-approvals if they were obtained prior to Jan 1 as regulations changed and some pre-approvals were rendered null and void. TD was honouring the old pre-approvals at the old guidelines last I heard, though.

Given the information that you've provided, the rates available to you more than likely won't be attractive as you stretched fairly thin qualifying-wise. Probably around 3.69% if you can get qualified.
Pre approval for both were done early Feb. Thx for the response.
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sdanny wrote: Pre approval for both were done early Feb. Thx for the response.
No problem at all - best of luck with your financing.
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Concierge Mortgage Group
#12179
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erexa wrote: We may end up selling this place in 2-3 years. I would still think variable is a better choice than locking ourselves.
Agreed.
Kevin Somnauth, CFA
Principal Broker/Owner - First Toronto Mortgage - MA (Ontario #13176, BC #X301007)
Real Estate Salesperson - Century 21 Innovative
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slahaz wrote: I am still not able to understand why a house that is valued over 1 Million would have a higher rate or higher risk even if the LTV is lower.

a. Home A valued at 1.2Million LTV 30%
b. Home B valued at 900k LTV 75%
Short answer, it doesn't make sense @slahaz.
Kevin Somnauth, CFA
Principal Broker/Owner - First Toronto Mortgage - MA (Ontario #13176, BC #X301007)
Real Estate Salesperson - Century 21 Innovative
Newbie
Apr 3, 2016
2 posts
Hi all,

A bit of a complicated renewal so looking for suggestions on rates/terms.

1. 3 season cottage: 290k, Maturing in April
2. Home. RBC homeline setup. 1st segment 110k matures in April, 2nd segment 140k renews June 7.

Bank is offering 5 fixed year at 3.29% but I'm not sure if I want to commit for 5 years. Perhaps I should do 1 or 2 year rate and then shop around with other lenders.

Note: I do write off about 40% of mortgage interest (business income) so it's important to keep the cottage mortgage interest separate from the home in this case.

Option 1 is to do a straight renewal on all 3 mortgages and have the same maturity dates. No fees involved.
Option 2 is to refinance the home and transfer the cottage under the home. Fees involved for the new title registration and processing fee. Prepayment charges as well if I do it before April. Note: I can save $200/year on cottage insurance without a mortgage. If I wait until April, then my maturity dates will be staggered which I do want and different interest rates will apply.
Option 3 is the straight renewal on all 3 mortgages and refinance home and transfer the cottage in the future.

Any other ideas or suggestions?

Thanks
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Nov 25, 2003
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Hi friendly mortgage experts - I'm looking for advice on a mortgage for a new (first!) home purchase with the wife.

Location: Stouffville
Purchase: 800k
Downpayment: 20% min, could be as high as 25%
Credit/employment: excellent

Currently looking at Tangerine as the best among the banks, at 3.34% 5yr fixed, 2.95% 5yr variable, both with 25/25 prepayments.

Via RateHub, CanWise and Butler are pulling in much better rates:
CW Variable: CW 2.75% (P-0.7), with 15/100 pp
B Variable: 2.5% (P-0.95), 20/20 pp
CW Fixed: 3.04%, 20/20 pp

The larger down payment does not seem to affect the rate offered, so I'm inclined to hang onto it instead of draining funds, drip it out via pre-payments.

CanWise listing says regular payment prepayments can be up to 100% - this seems crazy to be able to double up. Whats the catch?

Any advice is appreciated, and help finding the best rates is welcome.

Cheers!
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TheRequiem wrote: Hi friendly mortgage experts - I'm looking for advice on a mortgage for a new (first!) home purchase with the wife.

Location: Stouffville
Purchase: 800k
Downpayment: 20% min, could be as high as 25%
Credit/employment: excellent

Currently looking at Tangerine as the best among the banks, at 3.34% 5yr fixed, 2.95% 5yr variable, both with 25/25 prepayments.

Via RateHub, CanWise and Butler are pulling in much better rates:
CW Variable: CW 2.75% (P-0.7), with 15/100 pp
B Variable: 2.5% (P-0.95), 20/20 pp
CW Fixed: 3.04%, 20/20 pp

The larger down payment does not seem to affect the rate offered, so I'm inclined to hang onto it instead of draining funds, drip it out via pre-payments.

CanWise listing says regular payment prepayments can be up to 100% - this seems crazy to be able to double up. Whats the catch?

Any advice is appreciated, and help finding the best rates is welcome.

Cheers!
You can get 2.99% 5-year fixed with 20/20 pp :)
Kevin Somnauth, CFA
Principal Broker/Owner - First Toronto Mortgage - MA (Ontario #13176, BC #X301007)
Real Estate Salesperson - Century 21 Innovative
Newbie
Jun 24, 2008
28 posts
Toronto
This thread has been so helpful...thank you for this information. I also wanted to share our situation and get the advice of some of the experts here:

We are with TD Bank (have all our business with them). We have 3.5 years left on our mortgage and are up for renewal. Our original mortgage amount was $430K and we have $150K to go. We've always gone with a variable rate mortgage and our current rate is 2.09%. Our bank rep is offering us: 1- 3.29% for a 3 year amortization or 2- 3.39% for a 4 year amortization. The biweekly payment for the 3 year mortgage will be really challenging for us.

We know we want to have a mortgage with a big bank but I wanted hear your opinions on the term we should go for (fixed, variable, 1 year, 2 year, 3 year, etc). I'm leaning towards a 4 year mortgage where our payments are less but we save up and make lump sum payments whenever we can (hoping we don't get penalized for ending the mortgage earlier than term if we go with lump sum payments!).

Many thanks for reading this!
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TheRequiem wrote: Hi friendly mortgage experts - I'm looking for advice on a mortgage for a new (first!) home purchase with the wife.

Location: Stouffville
Purchase: 800k
Downpayment: 20% min, could be as high as 25%
Credit/employment: excellent

Currently looking at Tangerine as the best among the banks, at 3.34% 5yr fixed, 2.95% 5yr variable, both with 25/25 prepayments.

Via RateHub, CanWise and Butler are pulling in much better rates:
CW Variable: CW 2.75% (P-0.7), with 15/100 pp
B Variable: 2.5% (P-0.95), 20/20 pp
CW Fixed: 3.04%, 20/20 pp

The larger down payment does not seem to affect the rate offered, so I'm inclined to hang onto it instead of draining funds, drip it out via pre-payments.

CanWise listing says regular payment prepayments can be up to 100% - this seems crazy to be able to double up. Whats the catch?

Any advice is appreciated, and help finding the best rates is welcome.

Cheers!
You certainly have some great rates available

20% down- 5 yr fixed 2.99% with additional cash back major credit union 120 day rate hold 20/20 prepayment

25% down variable rate - prime - 1% currently 2.45% - 90 day hold 20/20 prepayment - this product has a slight restriction in that you can't prepay in full during the 5 yr term only
through a bonafide sale (regular 3 months penalty would then apply)

20% down -variable rate prime - .85% currently 2.60% - 90 day hold 15/15 prepayment - non restrictive product

Hope this helps

Phil
Phil Cragg
Mortgage Agent
Mortgage Outlet Inc Broker License #12628
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TheRequiem wrote: Hi friendly mortgage experts - I'm looking for advice on a mortgage for a new (first!) home purchase with the wife.

Location: Stouffville
Purchase: 800k
Downpayment: 20% min, could be as high as 25%
Credit/employment: excellent

Currently looking at Tangerine as the best among the banks, at 3.34% 5yr fixed, 2.95% 5yr variable, both with 25/25 prepayments.

Via RateHub, CanWise and Butler are pulling in much better rates:
CW Variable: CW 2.75% (P-0.7), with 15/100 pp
B Variable: 2.5% (P-0.95), 20/20 pp
CW Fixed: 3.04%, 20/20 pp

The larger down payment does not seem to affect the rate offered, so I'm inclined to hang onto it instead of draining funds, drip it out via pre-payments.

CanWise listing says regular payment prepayments can be up to 100% - this seems crazy to be able to double up. Whats the catch?

Any advice is appreciated, and help finding the best rates is welcome.

Cheers!
Hi there,

The rate you're being offered through Tangerine is not very competitive in the market right now, generally speaking. It's a decent bank rate (and has good pre-payment privileges), but there are much better options available for full featured products elsewhere.

The rates you've seen from the online brokerages (RateHub, CanWise, and Butler), are are reasonably good rates, but can be beat.

There's no catch to the double-up. It's just another pre-payment option that some lenders have. For example, some lenders will have 20/20, some 25/25, and some 15/15+double up. Which is best depends on how much pre-payment you actually intend on making, and whether increasing your regular frequency payment of making lump sum pre-payments is more your thing. You don't want to sacrifice too much in rate for attractive pre-payment privileges if you're not confident that you'll put the privileges to use.

Best,

Connor
_________________________________
Connor Green
Mortgage Awards of Excellence Winner
Concierge Mortgage Group
#12179

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