Real Estate

The Official Mortgage Rates Thread

Deal Addict
Jul 23, 2014
1126 posts
277 upvotes
Toronto, ON
Wondering if I should take Meridian renewal rate of 1-year Closed Fixed at 1.79%

They also offered me 2-year Closed Fixed for 2.25%

I'm coming off their 18m closed fixed 1.49% so extending another year for 1.79 might be a decent alternative.
Deal Guru
User avatar
Aug 8, 2012
10198 posts
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BC
RFD6482 wrote: Wondering if I should take Meridian renewal rate of 1-year Closed Fixed at 1.79%

They also offered me 2-year Closed Fixed for 2.25%

I'm coming off their 18m closed fixed 1.49% so extending another year for 1.79 might be a decent alternative.
What do they have for variable? Since that 1.79% is better than most people with existing "good" variable rates at P - 0.9% = 1.80% (e.g. from a year or 2 ago, not from today), and variables seem to be nowhere near that good lately, I would personally jump all over that 1-yr 1.79%.

Is that a straight-up renewal offer with no negotiation??
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Banned
Dec 29, 2003
577 posts
5 upvotes
Mississauga
I was offered 2.39 five year fixed, is this ok or should I negotiate?
Deal Addict
Jul 23, 2014
1126 posts
277 upvotes
Toronto, ON
ace604 wrote: What do they have for variable? Since that 1.79% is better than most people with existing "good" variable rates at P - 0.9% = 1.80% (e.g. from a year or 2 ago, not from today), and variables seem to be nowhere near that good lately, I would personally jump all over that 1-yr 1.79%.

Is that a straight-up renewal offer with no negotiation??
Nothing offered to me for variable. Only two options through mail and no negotiating.

I think I might take it just to extend it, is was going to wait until my November renewal and shop around for a decent 5-year but might just do this and delay my search until next year.
Deal Guru
User avatar
Aug 8, 2012
10198 posts
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BC
RFD6482 wrote: Nothing offered to me for variable. Only two options through mail and no negotiating.

I think I might take it just to extend it, is was going to wait until my November renewal and shop around for a decent 5-year but might just do this and delay my search until next year.
If they keep offering you low 1-years I would keep taking them year after year.

5 x 1-yr low rate can be better than one 5-yr variable especially when the variable rate discounts suck.

Paying 0.5% more to lock in for 5 years is starting off at a deficit that's hard to make up without a lot of hikes to the 1-year.

5-yr 2.29% = 1.79% 1-yr followed by 2.43% 4-yr

or if you get another 1.79% next year ... 5-yr 2.29% = 1.79% 1yr + 1.79% 1-yr + 2.67% 3-yr

The longer you save money with the lower rate shorter terms the higher and higher that end rate has to be to make the whole proposition "lose" compared to the 2.29% 5-yr.


To go back to the 1-yr 1.79% vs 2-yr 2.25% ... that's equivalent to 1.79% + 2.74% next year.

The 1-year they are offering you would have to go up a full 1% to make you lose out on picking 1+1 vs 2.

Use sslinn's excellent mortgage calculators here to play with numbers:
http://www.mortgagecalculatortoolkit.co ... alculator/
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...)
Deal Addict
Jul 23, 2014
1126 posts
277 upvotes
Toronto, ON
ace604 wrote: If they keep offering you low 1-years I would keep taking them year after year.

5 x 1-yr low rate can be better than one 5-yr variable especially when the variable rate discounts suck.

Paying 0.5% more to lock in for 5 years is starting off at a deficit that's hard to make up without a lot of hikes to the 1-year.

5-yr 2.29% = 1.79% 1-yr followed by 2.43% 4-yr

or if you get another 1.79% next year ... 5-yr 2.29% = 1.79% 1yr + 1.79% 1-yr + 2.67% 3-yr

The longer you save money with the lower rate shorter terms the higher and higher that end rate has to be to make the whole proposition "lose" compared to the 2.29% 5-yr.


To go back to the 1-yr 1.79% vs 2-yr 2.25% ... that's equivalent to 1.79% + 2.74% next year.

The 1-year they are offering you would have to go up a full 1% to make you lose out on picking 1+1 vs 2.

Use sslinn's excellent mortgage calculators here to play with numbers:
http://www.mortgagecalculatortoolkit.co ... alculator/
I must admit, this is an interest tactic coming from Meridian, I took their teaser rate of 1.49% jsut a year and half ago, and as it expires, they keep offering me a short-term rate but better than anything available now. Now if the rates jump next year, I'm sure their 1-year renewal rate will jump as much... but thats when I would really consider a long term lock in, but with low rate environment, this strategy keeps me as their customer.

My only concern is rates make crazy jumps like significant % but I can't see that happening like the 80's/90's, I'm still thinking it'll be a slow and steady increase.
Jr. Member
Apr 30, 2014
174 posts
65 upvotes
Sudbury, ON
BMO offered me few weeks ago 2.09% for 2-year fixed, in addition $500 credit. I usually bank with RBC and TD, but they offered to match, could not beat the rate. I was about to sign with BMO, the mortgage specialist from TD contacted yesterday and said there may be a drop in rate after long weekend and he may be able to provide a better rate then. Just wondering if anyone have heard of anything similar? My closing is on August 12 and would be hesitant to wait till the last minute.
Deal Fanatic
User avatar
Sep 13, 2011
5310 posts
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Toronto
jazziman wrote: I was offered 2.39 five year fixed, is this ok or should I negotiate?
It depends on which lender you are dealing with. For many, thats about as low as you will get. There are 5 year fixed rates out there right now as low as 2.29% however... or possibly even lower if you have LESS than 20% down payment.
Paul Meredith
Mortgage Broker, Author
CityCan Financial Corp (lic. 10532)
Deal Fanatic
User avatar
Feb 2, 2014
8001 posts
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Toronto
RFD6482 wrote: I must admit, this is an interest tactic coming from Meridian, I took their teaser rate of 1.49% jsut a year and half ago, and as it expires, they keep offering me a short-term rate but better than anything available now. Now if the rates jump next year, I'm sure their 1-year renewal rate will jump as much... but thats when I would really consider a long term lock in, but with low rate environment, this strategy keeps me as their customer.

My only concern is rates make crazy jumps like significant % but I can't see that happening like the 80's/90's, I'm still thinking it'll be a slow and steady increase.
What are they offering you for a longer term (ie 5 years)?
Kevin Somnauth, CFA
Principal Broker - First Toronto Mortgage - MA (Ontario #13176, BC #X301007)
Real Estate Salesperson - Century 21 Innovative
Deal Addict
Apr 26, 2004
2115 posts
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GTA
jazziman wrote: I was offered 2.39 five year fixed, is this ok or should I negotiate?
Are you getting cash back as well?
Mortgage Specialist in the GTA
Banned
Dec 2, 2009
255 posts
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Toronto
Geese_Howard wrote: Are you getting cash back as well?
Nope. I just basically walked into my bank and told them I'm buying a house and that's the rate they gave. Didn't know I could get cash back.
Member
Dec 21, 2010
204 posts
115 upvotes
northstarbd wrote: BMO offered me few weeks ago 2.09% for 2-year fixed, in addition $500 credit. I usually bank with RBC and TD, but they offered to match, could not beat the rate. I was about to sign with BMO, the mortgage specialist from TD contacted yesterday and said there may be a drop in rate after long weekend and he may be able to provide a better rate then. Just wondering if anyone have heard of anything similar? My closing is on August 12 and would be hesitant to wait till the last minute.
The bond yield today drops at least 7 basis point for the 2 year Canada bond - a drop of 11% as of now. I would assume this start to warrant a 1.99% 2-yr fixed mortgage rate. But as you know, the banks may not pass the saving onto customers...
Newbie
Dec 6, 2012
32 posts
7 upvotes
ORLEANS
Looking for advise:

I have been offered 2.29% Fixed 5-year on a conventional (20% down) non-collateral charge mortgage via True North.
I have talked Scotiabank down to 2.34% also non-collateral 5 year fixed.

Both offers included me covering 800-900$ of the costs (Lawyer Fee with True North around +900$, and Lawyer Fee 500$ and appraisal 300$ with Scotia = +800$). To keep my example simple, lets assume I pay this with cash at closing time and compare even mortgage amounts (costs are almost identical from both sources).

For this example (prefer not to disclose mortgage amount) lets say I am getting a mortgage amount of $400,000

Our payments would be as follows (accelerated bi-weekly):

True North's Lender: 400,000 @ 2.29% = 875.15 accelerated bi-weekly, balance remaining after 60 months = 327,787.42
Scotia Bank': 400,000 @ 2.34% = 880.07 accelerated bi-weekly, balance remaining after 60 months = 328,067.95

Is it accurate to say that going with Scotiabank would cost me an additional 4.92/payment * 26*5 payments = 639.60$ Additional Payments
Plus the difference in the ending mortgage balance after 60 months = about an additional 280.50

Therefore the cost of staying with Scotia bank is about 920.01$. As I am paying this difference over a period of time; I would say the present value cost is even less.

Both offers have sufficient pre-payment terms 15/15 with Scotia, 20/20 with True North.
I am very happy with my home and have zero intention of moving in the next 5 years.

Would others agree with these calculations? Any unforeseen pros/cons with either scenario? I do like dealing with Scotiabank but am not convinced they are worth the extra 920$. I had asked them to match the 2.29% rate, they said that they could not, then I asked for 2.34% but with waiving all fees. They countered with 2.34% but I pay legal and appraisal.

Is asking Scotia Bank to waive my monthly 12.95$ banking fee an option? Anyone have luck with this? Would I need to talk to the branch rather then my mobile mortgage advisor?
Jr. Member
Apr 30, 2014
174 posts
65 upvotes
Sudbury, ON
khkchan wrote: The bond yield today drops at least 7 basis point for the 2 year Canada bond - a drop of 11% as of now. I would assume this start to warrant a 1.99% 2-yr fixed mortgage rate. But as you know, the banks may not pass the saving onto customers...
I'm not very familiar on how bond system works. The drop you mentioned, is it something that is calculated at some cycle (days/weeks/months) and affects mortgage rate therefore?
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Sep 13, 2011
5310 posts
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Toronto
northstarbd wrote: I'm not very familiar on how bond system works. The drop you mentioned, is it something that is calculated at some cycle (days/weeks/months) and affects mortgage rate therefore?
Fixed mortgage rates are determined by bond yields, and yes there was a big drop today. The yields are however not as low as they have been recently. When yields drop like this, it puts downward pressure on rates. This doesn't necessarily means that there will be a drop, just as a sudden increase to yields doesn't necessarily mean there will be an increase. It just means that it is putting pressure on rates in the direction the yields are going. If we continue to see yields drop, then we will likely see a rate decrease. Sometimes rates need to stay at lower levels for some time before they feel comfortable enough to drop the rate.

You can follow the bond yields yourself here: http://www.investing.com/rates-bonds/ca ... bond-yield
Paul Meredith
Mortgage Broker, Author
CityCan Financial Corp (lic. 10532)

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