Real Estate

The Official Mortgage Rates Thread

Jr. Member
Sep 10, 2017
176 posts
34 upvotes
Current amount owing - 300K
Current rate - 3.59%- RBC (5yr fixed since 2013)
Renewal date- Sep 2018
Current value of house (primary and the only residence)- 650K (detached in gta bungalow)
Prepayment penalty to break mortgage- 6500$
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Mar 9, 2012
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valuemortgage wrote: As there is some misinformation here, I thought I would clarify these comments a bit.

1 - Credit check. Im not sure why you mention this as a "negative" thing, since credit checks (contrary to popular belief) are not bad for one's credit rating. Credit agencies such as Equifax understand that people shop around these days ad will group together inquires made for the same purpose as if they were a single hit. Not to mention that out of the formula used to determine credit scores, only 10% relates to inquires made to the credit profile.

Whenever a credit check can be avoided, it is something to consider. Inquiries will lower your credit score temporarily and it's well known across the board. Don't try to minimize it.

2 - The absolute majority of lenders will use FCT or FNF for their switches, and both title companies include what they call "remote signing". That means a representative will come to the client's house (including evening and weekends) at no cost, to collect signatures. No visit to lawyer/notary required. Banks are the ones that often require visits to a branch, as that opens up a possibility for the bank to try and sell bank accounts, insurance, loans, investments, etc. Monoline lenders dont offer those additional products.

No appointments required to renew your mortgage with the same bank, most banks will let you do it online. That's pretty fast.

3 - Posted rates are something that truly separates banks and monolines, as all big banks have terrible (and heavily inflated) posted rates, meant to hurt consumers when they break their mortgages. A quick look at a posted rate with all 6 big banks show a silly inflated posted rate such as 5y fixed at 4.94%, while monoline lenders will always have discounted rates (around 3% mark at this point). I recommend reading this article to understand the dangers of breaking a mortgage with a big bank (https://beta.theglobeandmail.com/globe- ... e15774375/).

An example of posted rates comparaison between the big 5 & monoline lenders. I tried to get all their posted rates... but I encountered some issues as you will see.

http://www.scotiabank.com/ca/en/0,,1112,00.html#a1
POSTED RATES // 1 yr fixed: 3.49% // 2 yrs fixed: 3.09% // 3 yrs fixed: 3.39% // 4 yrs fixed: 3.89% // 5 yrs fixed: 4.84%

https://www.multi-prets.com/en/Choose-Y ... /Our-rates
POSTED RATES // 1 yr fixed: 3.84% // 2 yrs fixed: 3.44% // 3 yrs fixed: 3:44% // 4 yrs fixed: 3.89% // 5 yrs fixed: 4.94%

https://www.truenorthmortgage.ca/rates/quebec
TRUE NORTH seems to hide their posted rates...

https://www.mcap.com/residential-mortga ... gage-rates
MCAP seems to hide their posted rates as well, they refer you to a mortgage broker...

http://www.canwise.com/rates
CANWISE seems to hide their posted rates as well, they refer you to a mortgage broker.

I love how transparents these monoline lenders are.


4 - I really have no idea where that absurd idea of "getting commission from the insurance" came from. This is like saying a doctor get paid commission from oil refineries when a patient drives to a hospital. Can you provide any evidence to such outrageous claim?

Why can you get better rates for insured mortgage vs down payments of 20%? then? Something to do with the conditions maybe? What are the conditions on insured mortgage that allows you to get your clients a better rate? They MUST take 30 years amortization? What is it? Tell us, it's your chance to be transparent.

5 - This is a tactic that bank employees often try. They threaten clients with fees, should the client decide to leave them. Now, why on Earth would someone pay thousands of dollars for in mortgage interest, only to save $9.95 a month in (unnecessary) banking fees? Not to mention that banks such as RBC do NOT require you to have a mortgage with them. I actually have an account with RBC and pay no fees, as I qualify for the multi product rebate without any mortgage with them. I have a savings account, VISA and TFSA.

http://www.rbcroyalbank.com/products/de ... ebate.html
I was referring to the No limit banking, Signature no limit banking and VIP banking that requires the mortgage product for the multi product rebate.

Last edited by skunkyjosh on Sep 11th, 2017 4:57 pm, edited 2 times in total.
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Cutevampire wrote: $330k approximately... 17 years left on amortization....
Is that the home value or the mortgage amount? We need both numbers. Is 17 years the remaining amortization based on years passed? Or is this an effective amortization taking prepayment or accelerated payments into consideration?
Paul Meredith
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Not necessarily. Lenders will save on the cost of funding those insured mortgages but that does not necessarily mean they will pay more. And even if the lender paid more for an insured deal, the insurer (CMHC/GE/CG) are not paying any commission to anyone. If anything, the client is the only one really benefiting from this, since he/she has already paid mortgage insurance and can keep that insurability and not have to cover the costs the lender would have to put into that rate.
ahlaker wrote: My understanding is that brokers generally get larger commissions when originating insured deals - isn't that correct? There is quite a bit of opacity around broker commissions, which IMO should be improved. It's been discussed in this thread before that different terms come with different commissions - surely it wouldn't hurt the broker community if their fee structures were open for everyone to see. Just my 2 cents.
Andre Oliveira - Mortgage Agent at Valuemortgage
2018 Top 20 National - Mortgage Intelligence
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Skunk - plenty of choice to see posted rates by monolines: (and the reason you dont see posted rates by Canwise or Truenorth is becasue those are NOT lenders.. those are brokerages).

http://www.cmls.ca/residential-mortgages/mortgage-rates
http://www.icicibank.ca/personal/credit ... gages.page
https://www.alterna.ca/Rates/Mortgages/

Now compare that to banks that heavily inflate their posted rates (such as RBC for example)... and then understand the formula that the banks manipulated in order to punish clients trying to leave them.
Andre Oliveira - Mortgage Agent at Valuemortgage
2018 Top 20 National - Mortgage Intelligence
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Sep 19, 2012
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valuemortgage wrote: Not necessarily. Lenders will save on the cost of funding those insured mortgages but that does not necessarily mean they will pay more. And even if the lender paid more for an insured deal, the insurer (CMHC/GE/CG) are not paying any commission to anyone. If anything, the client is the only one really benefiting from this, since he/she has already paid mortgage insurance and can keep that insurability and not have to cover the costs the lender would have to put into that rate.
Interesting. I had heard that brokers generally got a bonus for originating an insured deal. Must be a lender-by-lender basis. Are commissions from lenders fairly standard or is there a wide distribution? As I said and @skunkyjosh alluded to, transparency around broker commissions could be improved.
skunkyjosh wrote: Why can you get better rates for insured mortgage vs down payments of 20%? then? Something to do with the conditions maybe? What are the conditions on insured mortgage that allows you to get your clients a better rate? They MUST take 30 years amortization? What is it? Tell us, it's your chance to be transparent.
Insured mortgage carries significantly less risk than an uninsured one, so that's why the lender offers a lower rate. That said, when you factor in the cost of the insurance premium (which the borrower pays), the effective rate is often worse for an insured deal than for an uninsured one. Could brokers be more transparent in terms of how they are compensated, sure, but I don't think you can generalize and say that brokers push clients to certain lenders or certain products because of commission structures.
Nikola Alaica, CPA, CA | Tax, Accounting, Mortgages
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Unrelated to the discussion, but I think you have the unusual nickname in all RFD...lol
Cutevampire wrote: $330k approximately... 17 years left on amortization....
Andre Oliveira - Mortgage Agent at Valuemortgage
2018 Top 20 National - Mortgage Intelligence
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Jr. Member
Sep 10, 2017
176 posts
34 upvotes
Current amount owing - 300K
Current rate - 3.59%- RBC (5yr fixed since 2013)
Renewal date- Sep 2018
Current value of house (primary and the only residence)- 650K (detached in gta bungalow)
Prepayment penalty to break mortgage- 6500$

Should i break it early and get another 5yr fixed ?

I dont want to be renewing come sep 2018 @ 3.50 or more
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Apr 26, 2004
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Eaglyeye wrote: Current amount owing - 300K
Current rate - 3.59%- RBC (5yr fixed since 2013)
Renewal date- Sep 2018
Current value of house (primary and the only residence)- 650K (detached in gta bungalow)
Prepayment penalty to break mortgage- 6500$

Should i break it early and get another 5yr fixed ?

I dont want to be renewing come sep 2018 @ 3.50 or more
If you're willing to get a heloc and take a 3 or 4 year rate you may be able to get a much lower rate and have your fees and penalty paid for.
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I hope the mortgage experts out here can help me out.

I took a mortgage with Scotia 2 years back (20% down payment, 5 year fixed, 30 years amortization)- the purchase cost was about 350k.

My mortgage balance is now about 265k, and the market price of the town house is about 500k. (based on a couple of my neighbours sale price over the last 3 weeks).

I wanted to pay off a couple of loans- Honda Finance and another medical loan which is high % interest - total 15k.

I also wanted to borrow another 35k apart from the 15k mentioned above. (50k in total).

Based on the estimated market price (500k)- would it be possible for me to approach Scotia for another 50k? This would make my borrowed portion (265k+50k)=315k.
i.e approximately about 60% of the market price.

1. I am confused whether my ceiling is 65% of house value or 80% of house value. Which one is the correct %

2. I would prefer going for another mortgage whose term (3 years) would coincide with the 5 year maturity period of my primary mortgage. And then I can renew or refinance both into a single mortgage for 315k (or whatever is my combined balance) during the renewal time.

3. I know that i have another option of LOC with scotia based on my home equity- but i thought i would avoid it since the interest % is higher than the 3 year fixed term mortgage. Or did i get that wrong?

4. To sum it up- can i ask Scotia for another 50k (paid to my chequing account) as another mortgage with a term whose maturity coincides with my 1st mortgage maturity date.

I would greatly appreciate if experts can suggest if it's doable. Thanks in advance!
Member
Sep 4, 2015
235 posts
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Kitchener, ON
I've had two mortgage brokers I asked about locking in rates for me.

One said I had 2.7% with the chance of as low as 2.39% back in July. Now he's telling me I was never locked in because the rates were stable and the rate is now 3.09% which I am locked in at for 120 days.

The other one said I was locked in however didn't specify for how long. If it was 120 days then it would still be active. She now tells me rates are much higher and that rate is no longer available but from what I can see they are both now offering 120 day lock in periods.

I was foolish not to get an formal agreement in writing for each of these.

Do you think the brokers are lying about the rate holds or is this common to miss out on it all. I know the difference is only 3k over 5 years but that's not chump change either.
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The only way to lock a rate is through an application being completed and submitted to the lender, and that lender approving the application. If anyone told you that he/she obtained an approval for you.. did they provide you a copy of the approval issued by the lender? Did you submit a full application?
Rates have gone up quite a bit in the recent days/weeks.
Andre Oliveira - Mortgage Agent at Valuemortgage
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canadianclub wrote: I've had two mortgage brokers I asked about locking in rates for me.

One said I had 2.7% with the chance of as low as 2.39% back in July. Now he's telling me I was never locked in because the rates were stable and the rate is now 3.09% which I am locked in at for 120 days.

The other one said I was locked in however didn't specify for how long. If it was 120 days then it would still be active. She now tells me rates are much higher and that rate is no longer available but from what I can see they are both now offering 120 day lock in periods.

I was foolish not to get an formal agreement in writing for each of these.

Do you think the brokers are lying about the rate holds or is this common to miss out on it all. I know the difference is only 3k over 5 years but that's not chump change either.
If you had a true rate-hold, the rates would still be available to you. As Andre mentioned above - the only way to lock in a rate is with a full application (or a semi-full application if you are looking for a pre-approval, in which case you wouldn't have a property address, etc).

The likelihood is that you were never truly submitted if the can't offer you the rates that they offered initially.

Cheers,

Connor
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Connor Green
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wolfpack27616 wrote: I hope the mortgage experts out here can help me out.

I took a mortgage with Scotia 2 years back (20% down payment, 5 year fixed, 30 years amortization)- the purchase cost was about 350k.

My mortgage balance is now about 265k, and the market price of the town house is about 500k. (based on a couple of my neighbours sale price over the last 3 weeks).

I wanted to pay off a couple of loans- Honda Finance and another medical loan which is high % interest - total 15k.

I also wanted to borrow another 35k apart from the 15k mentioned above. (50k in total).

Based on the estimated market price (500k)- would it be possible for me to approach Scotia for another 50k? This would make my borrowed portion (265k+50k)=315k.
i.e approximately about 60% of the market price.

1. I am confused whether my ceiling is 65% of house value or 80% of house value. Which one is the correct %

2. I would prefer going for another mortgage whose term (3 years) would coincide with the 5 year maturity period of my primary mortgage. And then I can renew or refinance both into a single mortgage for 315k (or whatever is my combined balance) during the renewal time.

3. I know that i have another option of LOC with scotia based on my home equity- but i thought i would avoid it since the interest % is higher than the 3 year fixed term mortgage. Or did i get that wrong?

4. To sum it up- can i ask Scotia for another 50k (paid to my chequing account) as another mortgage with a term whose maturity coincides with my 1st mortgage maturity date.

I would greatly appreciate if experts can suggest if it's doable. Thanks in advance!
You can borrow up to 80% of the home's value. The 65% refers to the maximum on a Home Equity Line of Credit (HELOC). The 65% refers to the HELOC portion only, however when combining with a mortgage, you can go up to the full 80%. As you are aware, the rate for a HELOC is higher, and given your needs, simply refinancing the mortgage would likely be the better option for you.

What Scotia will do is add an additional component to your mortgage for the new 3 year term, which would turn your mortgage into a collateral charge (Scotia STEP product). It's not how most lenders do it, and is a little messier. Most lenders would just do a blended rate with your existing mortgage and the new money needed, giving you a single rate, payment and maturity date for both, and therefore eliminating the need to refinance later. Scotia stopped down that a few years ago and has moved to the new method mentioned above.
Paul Meredith
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CityCan Financial Corp (lic. 10532)
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GreenMortgages wrote: If you had a true rate-hold, the rates would still be available to you. As Andre mentioned above - the only way to lock in a rate is with a full application (or a semi-full application if you are looking for a pre-approval, in which case you wouldn't have a property address, etc).

The likelihood is that you were never truly submitted if the can't offer you the rates that they offered initially.

Cheers,

Connor
What will be the difference with HELOC or without ? do i need to use the HELOC or just take it and keep for any future need ?

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