Real Estate

The Official Mortgage Rates Thread

Deal Addict
User avatar
May 1, 2017
1064 posts
227 upvotes
DaveTO wrote: Seems like Meridian's Fixed 2.2% for 2 years is for new purchases only. Bummer!

I am looking to re-finance or just renew. I was thinking of taking some money out to do some renovations on my rental property.

What are some good short term (less than 3 years) fixed rates currently offered besides Meridian's 2.2%?

Thanks!
Hi there,

As Andre mentioned, rates for refinances are not as aggressive as switches/purchase transactions. For a 1 year fixed refinance, you'd be looking at 2.89%. For a 2 year fixed, you'd be looking at 2.94%. A 3 year refinance is around 2.99%-2.94% and your refinance costs would be covered (appraisal, legals, and discharge fee from current lender). A five year term for a refinance is about 3.14% fixed.

Cheers,

Connor
_________________________________
Connor Green
Mortgage Agent
Concierge Mortgage Group
#12179
Member
Dec 27, 2006
208 posts
7 upvotes
Toronto
What about a switch? What are the 1-3 years fixed rates for me to leave TD come February? Thanks.
GreenMortgages wrote: Hi there,

As Andre mentioned, rates for refinances are not as aggressive as switches/purchase transactions. For a 1 year fixed refinance, you'd be looking at 2.89%. For a 2 year fixed, you'd be looking at 2.94%. A 3 year refinance is around 2.99%-2.94% and your refinance costs would be covered (appraisal, legals, and discharge fee from current lender). A five year term for a refinance is about 3.14% fixed.

Cheers,

Connor
Newbie
May 9, 2009
8 posts
1 upvote
valuemortgage wrote: This is what bank employees will sometimes resort to, when they know they cant compete in terms of mortgage rates.. they will simply make absurd claims, in a desperate effort to put fear in your heart. Imagine the absurdity of the claim in itself.. so, if a client gets a mortgage with any lender that is not part of the "big banks club" then no bank will ever touch that client again. Who would lose in that scenario? The banks! Just ask that advisor for any kind of evidence supporting that insane claim, and you will see what they are actually trying to do... they just want to scare you.
Thanks Andre! I figured as much. She was also trying to push a collateral.
Deal Addict
User avatar
May 1, 2017
1064 posts
227 upvotes
DaveTO wrote: What about a switch? What are the 1-3 years fixed rates for me to leave TD come February? Thanks.
Hello,

The fact that your mortgage is currently with TD presents an issue. TD only issues collateral charge mortgages, so the likelihood that you have a collateral mortgage is fairly high. You should call and ask to confirm. Only a small subset of lenders can handle collateral charge switches as actual switch transactions. The majority of lenders need to treat the collateral switch as a refinance in order to complete the transfer. As we've already covered, refinances are not eligible for the best rates in the market currently. So, you would be sort of restricted to the lenders who can facilitate the collateral charge switch in order to get competitive rates.

Because of this, the rates for your switch would be very similar to the rates for your refinance for the 1 to 3 year terms.

Now, if your mortgage was originally insured (if you had less than 20% down payment initially), you would have access to the best rates in the market for 5 year fixed or variable products for a switch transaction! 2.8x% 5 year fixed and p-1.15% variable.

It's also important to note that some lenders will not process applications for switches until 90 days or less to your maturity date. Some lenders, for some products, allow for applications up to 120days from maturity. So, depending on which product you'd like to take, you may have to wait a few weeks to get your application submitted.

Regards,

Connor
_________________________________
Connor Green
Mortgage Agent
Concierge Mortgage Group
#12179
Deal Addict
User avatar
May 1, 2017
1064 posts
227 upvotes
its_lena wrote: Thanks Connor!
Do you know who would offer lower rates?
Hi Lena,

No problem at all. There are a plethora of lenders ('A' lenders) with cheaper rates than what you've been offered! Some operate exclusively through the broker channel, and some don't.

Regards,

Connor
_________________________________
Connor Green
Mortgage Agent
Concierge Mortgage Group
#12179
Deal Fanatic
User avatar
Feb 2, 2014
7569 posts
2022 upvotes
Toronto
IceYan wrote: Hi Connor,
Thank you for the response. I might be able to get the extra 5%. What benefits would that afford me?

Thanks.
With 25% down, I have 2.84% 5-year fixed. With 20% down, 2.89% 5-year fixed.
Kevin Somnauth, CFA
Principal Broker - First Toronto Mortgage - MA (Ontario #13176, BC #X301007)
Real Estate Salesperson - Century 21 Innovative
Deal Fanatic
User avatar
Feb 2, 2014
7569 posts
2022 upvotes
Toronto
DaveTO wrote: Seems like Meridian's Fixed 2.2% for 2 years is for new purchases only. Bummer!

I am looking to re-finance or just renew. I was thinking of taking some money out to do some renovations on my rental property.

What are some good short term (less than 3 years) fixed rates currently offered besides Meridian's 2.2%?

Thanks!
2.59% for a 3-year. You can go as low as 2.88% for a 5-year and 2.15% for 5-year variable.

If the mortgage is insured, you will get even lower.
Kevin Somnauth, CFA
Principal Broker - First Toronto Mortgage - MA (Ontario #13176, BC #X301007)
Real Estate Salesperson - Century 21 Innovative
Deal Fanatic
User avatar
Feb 2, 2014
7569 posts
2022 upvotes
Toronto
GreenMortgages wrote: Hi there,

Unfortunately, it is extremely unlikely that this mortgage broker has 3.09% from Scotiabank, obtained a week ago. Do you have anything in writing? Their rates have been well over 3.29% for quite some time. You may want to double check with the broker you're using. As for the costs to lock in - there usually aren't any, in some cases there is an administration fee. It's worth noting that you wouldn't get the highly discounted rates that the same lender is offering. Instead you would get their standard fixed rate.

Regards,

Connor
100% agreed Connor. That is why I asked if it was via a mortgage specialist or broker. 3.04% 5-year fixed isn't happening with BNS.
Kevin Somnauth, CFA
Principal Broker - First Toronto Mortgage - MA (Ontario #13176, BC #X301007)
Real Estate Salesperson - Century 21 Innovative
Deal Addict
User avatar
Dec 1, 2015
1966 posts
918 upvotes
Etobicoke, ON
its_lena wrote: Thanks Andre! I figured as much. She was also trying to push a collateral.
Collateral charges now are something to pay really close attention, since the new mortgage rules from last year made transfers out of those products a real pain..

Just want to add a bit of information on the subject of "collateral" and "charge", as those words often come up here and there is endless confusion regarding those terms.

First we need to understand what "mortgage" and "charge" are, and that they are 2 completely different things. A mortgage is just a loan, similar to a car loan or any personal loan. You ask a lender for X amount of money, and sign a document attesting you will pay it back. In order to offer low rates on mortgage loans, lenders need to have that loan secured by a collateral, so that in the event the loan is not paid back, the lender has rights registered against the property. To register their interest on the property, the lenders use what is called a "charge", which is just like any other lien. The key difference here is that when the lender asks the lawyer to register that lien, they can use one of these 2 types of charge : a "standard mortgage charge" or a "collateral charge".
Why are they different? Because with a regular standard charge, the lender registers the lien in the exact same amount as the mortgage loan. So, if you buy a $500k property and have 200k downpayment, the mortgage amount will be 300k, and the lender will register a 300k lien (the charge) against it, to "secure" that loan. If you need to borrow more money later on, as years go by and the property value increases, the lender cannot simply release more money to you. They must remove that "charge", or as we often say - it must be "discharged", and register a new lien. Using the numbers above, if the property is now worth 600k and the client wants to get 100k back and refinance that mortgage, the lender would have to discharge that mortgage and register a new one, with a higher amount (matching the new amount required). As the market evolved, more products were created to suit different needs of clients in different situations, so some lenders started offering mortgages that would now be secured by a "collateral charge" (instead of a standard mortgage charge), simply because a collateral charge allows the lender to register X amount against the property and the amount could be higher than the mortgage amount being disbursed. In the example I used above, the lender could ask the lawyer to register a collateral charge against the property in the amount of $500k, even though they were only releasing to the client 300k. The potential advantage to the client is that if he needs 100k later on, the current charge registered ALREADY covers up to 500k, so they can adjust the loan without the need to remove the charge and register a new one.
Now the real downside of a collateral charge - it cannot be moved from lender A to lender B without the assistance of a lawyer or a title company. What this means is that at the end of your term, should you decide to change lenders because you see a better offer with a different lender, even if you have no intention of cashing out any equity, this transfer from lender A to B would be treated as a refinance, and you would be required to pay a lawyer or a title company some fees, around $1000.00 or so. On top of that, refinances are now uninsurable mortgages so lenders are charging higher interest rates for these deals. If you only had a simple standard mortgage charge, you could move from A to B without any legal fees, as standard mortgage charges can be transferred without legal services required and would get lower rates.
The thing to remember is that a collateral charge will give you some flexibility ONLY if you need to borrow more against the property value, down the road. A standard mortgage charge would not give you that flexibility without extra costs, however if you dont need to borrow more against the equity, it saves you money as you have more freedom to change lenders without legal fees.

About the word "conventional" - It only means a mortgage scenario where the client has 20% downpayment (if purchasing) or 20% equity (in transfers or refinances). Because the lenders do not need to buy mortgage insurance, this loan is called "conventional". In situations where the down payment/equity is less than 20%, you are required to have the loan insured by CMHC/Genworth, and this loan is NOT called "conventional" - this is what we call a "high ratio" or "insured" mortgage. It still has NOTHING to do with the type of charge, as the charge is simply the lien that will be registered against the property, not the type of loan.

Lenders such as TD bank and NBC use only collateral charges. So, the scenarios below are possible :

A - Client is buying a 500k property with 5% down payment - this is not a "conventional" mortgage because it needs to be insured. This will be a "high ratio" or "insured" mortgage, but TD will tell the lawyer to register a collateral charge to secure the loan. As a result, you will have an insured (or high ratio) mortgage attached to a collateral charge.
B - Client is buying a 500k property with 30% down payment - this does not require insurance, so it will be a "conventional" mortgage, and TD will tell the lawyer to register a collateral charge to secure the loan, just like the scenario above. As a result, you will have a conventional mortgage attached to a collateral charge.

If the lender is First National, Industrial Alliance, Mcap, ICICI Bank, Paradigm, and pretty much all other lenders on the broker channel :

A - Client is buying a 500k property with 5% down payment - this is not a "conventional" mortgage because it needs to be insured. This will be a "high ratio" or "insured" mortgage, but these lenders will tell the lawyer to register a standard mortgage charge to secure the loan. As a result, you will have an insured mortgage attached to a standard mortgage charge.
B - A - Client is buying a 500k property with 30% down payment - this is a conventional loan, as it does not require insurance. This will be a "conventional" mortgage and these lenders will tell the lawyer to register a standard mortgage charge to secure the loan. As a result, you will have an conventional mortgage attached to a standard mortgage charge.
Andre Oliveira - Mortgage Agent at Valuemortgage
2018 Top 20 National - Mortgage Intelligence
FSCO # 10428
Deal Addict
User avatar
Dec 1, 2015
1966 posts
918 upvotes
Etobicoke, ON
Check my post above, to understand the implications of leaving TD.
DaveTO wrote: What about a switch? What are the 1-3 years fixed rates for me to leave TD come February? Thanks.
Andre Oliveira - Mortgage Agent at Valuemortgage
2018 Top 20 National - Mortgage Intelligence
FSCO # 10428
Newbie
Nov 1, 2017
5 posts
Hi,

Do you know what rate BNS would offer for a renewal with approximately 185k left on the mortgage?
Deal Addict
User avatar
Dec 1, 2015
1966 posts
918 upvotes
Etobicoke, ON
Rates with banks could vary a lot based on several factors, as each branch has specific targets of profitability and retention.
Andre Oliveira - Mortgage Agent at Valuemortgage
2018 Top 20 National - Mortgage Intelligence
FSCO # 10428
Deal Addict
Sep 12, 2017
1632 posts
138 upvotes
If one already has a mortgage commitment from a lender how long does the close process take? Currently looking/waiting on a lawyer.
Member
Nov 11, 2013
395 posts
64 upvotes
Hi

Quick question. Looking to purchase a condo that’s around 430k with 10% down payment. Good income good credit score.

What can I expect for mortgage rates? 5 year fixed.

Top

Thread Information

There are currently 11 users viewing this thread. (8 members and 3 guests)

fillalph, 6ixMortgageGroup, someone16, OhmLaw, Raikkonen, CDA, guiness, penniless