Real Estate

The Official Mortgage Rates Thread

Deal Fanatic
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Sep 13, 2011
5059 posts
1797 upvotes
Toronto
AbdurR62175 wrote: Looking for mortgage approval. I contacted RBC but the person told me he is not aware of the new CHMC rule for self-employed so he is going to do some research and get back to me. I came here in Canada in 2016

2016 T4 filled - 58K
2017 T4 Filled - 110K
2018 - Contract job 70 an hour 40 hours a week.

Believe based on new CHMC rules I dont need to show up 2 years incorporation tax filing ( I have it but nill tax filing as I was doing permanent job and incorporation was untouched starting 2016).
Can anyone tell me if I can get mortgage approval of around 500K for a townhouse/semi detached in southern ontario?
Is your contract with the same employer you were with when you were salaried? Just switched to being paid as an independent contractor?
Paul Meredith
Mortgage Broker, Author
CityCan Financial Corp (lic. 10532)
Newbie
Aug 15, 2018
63 posts
52 upvotes
PaulMeredith wrote: Sounds to me like they are blending the remaining 6 months at your current rate with their current 4 year fixed giving you a lower effective rate.
The offer they are giving you is not terrible, but it's really hard to say what is going to happen. Personally, I would try to hold on a little longer. Fixed rates increased this passed week going in the opposite direction of the bond yields, which is really odd. Fixed mortgage rates are determined by bond yields and they almost always will follow them. This being one of the rare cases where they didn't. If the yields continue to trend down however, it WILL start to force downward pressure on fixed rates.

Of course, the long term prediction is for rates to continue to rise, and they will. But that doesn't mean there won't be ups and downs along the way.

Can you tell me when in 2016 that you did your refinance? I'm looking for the exact date here. it will make a difference on what can be offered believe it or not. The maximum rate hold for a switch is typically 90 days. It still may even make sense to pay a penalty and to switch early, however you want to prolong this for as long as you can obviously.

The refinance was in May 24, 2017, 2 years fixed, 2.14%. What rate would justify breaking term early on a rate like that? Hard to imagine something attractive enough.
Newbie
Feb 13, 2017
52 posts
8 upvotes
Scarborough
Hi

Trying to make sense of this I have a mortgage renewal come up. However am planning on selling current home buying new home within a year. My adviser suggested that I transfer my mortgage into a Line of Credit with a rate Prime + 0.5% = 4.45%. It allows the flexibility of paying off the balance without penalty and there is no set term... also I have the option switch it back to a regular mortgage plan. I feel like this is a good option but also feel like the adviser is also trying to sell me into a new product. Should I be concerned about my credit score of switching to this Line of Credit. I figure when I pay it off and apply for a new mortgage I'll go thru another credit check within a short time frame.

Another option is to continue with my mortgage plan and renew with 5 year Open Variable rate Prime + 1.8% = 5.75 this will still allow me to pay off the mortgage anytime without penalty.

Appreciate any advice.
Deal Addict
Feb 9, 2013
1781 posts
604 upvotes
Mississauga
-How much is the mortgage owing? 480k
-Roughly, what is the current market value of the property? 940k
-Which city is the property located in? Richmond Hill
-Is the property owner-occupied or a rental? owner occupied, basement rental
-Who is your current lender? bmo
-Do you have a HELOC tied to the mortgage? no
-Is the mortgage CMHC insured? no
-When did you buy the property? 2016
-When is your renewal date? jan 2019

I have another condo closing in 2020 that may move into, and either sell/rent this one out. So looking for 2 year term
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Sep 13, 2011
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Toronto
Ofirsc wrote: The refinance was in May 24, 2017, 2 years fixed, 2.14%. What rate would justify breaking term early on a rate like that? Hard to imagine something attractive enough.
Thanks for the info. Unfortunately, any refinances on properties valued at over $1 million done after November 30th, 2016 would make your mortgage 'uninsurable', which means that lowest rates would not be available. That being said, it would not make sense for you to switch lenders at this time.
Paul Meredith
Mortgage Broker, Author
CityCan Financial Corp (lic. 10532)
Deal Fanatic
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Sep 13, 2011
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anthonyvl7101084 wrote: Hi

Trying to make sense of this I have a mortgage renewal come up. However am planning on selling current home buying new home within a year. My adviser suggested that I transfer my mortgage into a Line of Credit with a rate Prime + 0.5% = 4.45%. It allows the flexibility of paying off the balance without penalty and there is no set term... also I have the option switch it back to a regular mortgage plan. I feel like this is a good option but also feel like the adviser is also trying to sell me into a new product. Should I be concerned about my credit score of switching to this Line of Credit. I figure when I pay it off and apply for a new mortgage I'll go thru another credit check within a short time frame.

Another option is to continue with my mortgage plan and renew with 5 year Open Variable rate Prime + 1.8% = 5.75 this will still allow me to pay off the mortgage anytime without penalty.

Appreciate any advice.
I think the HELOC option is a great way to go. Providing you have decent credit, you do not need to worry about a couple of credit checks. Many seem to believe that your credit will plummet every time it is checked. This is completely untrue. While it may drop a few points from each check, the portion of your score that is made up from credit checks is quite minimal. Your score will fluctuate up and down weekly as it is. There have been times where you can have a credit check done, and then have another done a few weeks later and the score might actually be higher. Only if you have weak or 'borderline' credit do you really need to be concerned about this. And even then, you're only talking about a couple of checks here. For borrowers with solid credit, a few credit checks would have an insignificant effect on your score.

900 is the best credit score and 300 is the worst. Anything over 650 would get you best rates for 'most' situations', however some lenders may require 680 or even 700.

Let's say for example you have a score of 750. If you to have your credit checked, it might drop you to 747. Then if you were to get another credit check, it might drop you to 743. ) This is not the actual amount your credit will drop, and that number will vary from person to person, but it should be fairly close.) This would be 100% meaningless. As long as you pay your bills on time and don't have any collections, then you really don't need to worry about your score or the effects of a few credit checks.

When applying for a mortgage, you can have as many credit checks as you like within a 45 day window and they will only count as a single check towards your score.
Paul Meredith
Mortgage Broker, Author
CityCan Financial Corp (lic. 10532)
Deal Fanatic
User avatar
Sep 13, 2011
5059 posts
1797 upvotes
Toronto
jdu0ng wrote: -How much is the mortgage owing? 480k
-Roughly, what is the current market value of the property? 940k
-Which city is the property located in? Richmond Hill
-Is the property owner-occupied or a rental? owner occupied, basement rental
-Who is your current lender? bmo
-Do you have a HELOC tied to the mortgage? no
-Is the mortgage CMHC insured? no
-When did you buy the property? 2016
-When is your renewal date? jan 2019

I have another condo closing in 2020 that may move into, and either sell/rent this one out. So looking for 2 year term
If you are looking for a 2 year term, then your only option will be to renew with BMO, as the minimum term for switches is 3 years. If you wanted to switch to a 3 year term, the lowest rate is 3.34%. OR, you could switch to a 5 year variable at prime -1.24% (2.71%) with the intention of breaking it if you sell your home after two years. This would likely work out to be cheaper for you, even factoring in the penalty.

What is the 2 year rate BMO has offered you to renew with them?
Paul Meredith
Mortgage Broker, Author
CityCan Financial Corp (lic. 10532)
Newbie
Aug 15, 2018
63 posts
52 upvotes
PaulMeredith wrote: Thanks for the info. Unfortunately, any refinances on properties valued at over $1 million done after November 30th, 2016 would make your mortgage 'uninsurable', which means that lowest rates would not be available. That being said, it would not make sense for you to switch lenders at this time.
Thanks for the info.
My house was re-financed at a valuation of 950k so I think I'm ok from under 1 mil perspective.

Question:
If I do a straight switch without changing the mortgage amount or amortization, do the banks still do an appraisal?
What if I switch from a collateral mortgage to a traditional one? Any appraisal there?
I'm asking because an appraisal today would value my home lower than it was in my May 2017 refinance.

Thank you
Sr. Member
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Nov 30, 2007
503 posts
73 upvotes
North York
Has anyone heard of RFA mortgage? Any issues etc?

Also, for reference for other folks, here are the best rates i've been able to get on 700k property with 20-40% down as of last Fri. This is a mix of rates obtained from Dash, True North and Canwise.
Variable (no bona fide sales clause)
20% down 2.95%
35% down 2.75%
Fixed (no bona fide sales clause)
20% down 3.64%
25-30% down 3.59%
35% down 3.44%

with $500 cash back.

(If anyone knows any better, please let me know by Monday!)

Still deciding whether to take a chance and go variable or hedge and stay fixed and if the slightly lower rates are worth putting more $ down (vs investing elsewhere)...
Newbie
Sep 17, 2011
10 posts
Toronto
Looking for renewing mortgage for Dec.20, 2018.
amount -$200,000
property value $800,000
rental property in Toronto. Looking for best rate.
Please PM me with best rates.
Deal Fanatic
User avatar
Feb 2, 2014
7356 posts
1861 upvotes
Toronto
AbdurR62175 wrote: Looking for mortgage approval. I contacted RBC but the person told me he is not aware of the new CHMC rule for self-employed so he is going to do some research and get back to me. I came here in Canada in 2016

2016 T4 filled - 58K
2017 T4 Filled - 110K
2018 - Contract job 70 an hour 40 hours a week.

Believe based on new CHMC rules I dont need to show up 2 years incorporation tax filing ( I have it but nill tax filing as I was doing permanent job and incorporation was untouched starting 2016).
Can anyone tell me if I can get mortgage approval of around 500K for a townhouse/semi detached in southern ontario?
It really depends on your work history. We may be able to get it done if you have a prior experience in the industry.

I'm guessing you work in IT?
Kevin Somnauth, CFA
Principal Broker - First Toronto Mortgage - MA (Ontario #13176, BC #X301007)
Real Estate Salesperson - Century 21 Innovative
President's Club Award Winner At The Mortgage Architects
Deal Fanatic
User avatar
Feb 2, 2014
7356 posts
1861 upvotes
Toronto
anthonyvl7101084 wrote: Hi

Trying to make sense of this I have a mortgage renewal come up. However am planning on selling current home buying new home within a year. My adviser suggested that I transfer my mortgage into a Line of Credit with a rate Prime + 0.5% = 4.45%. It allows the flexibility of paying off the balance without penalty and there is no set term... also I have the option switch it back to a regular mortgage plan. I feel like this is a good option but also feel like the adviser is also trying to sell me into a new product. Should I be concerned about my credit score of switching to this Line of Credit. I figure when I pay it off and apply for a new mortgage I'll go thru another credit check within a short time frame.

Another option is to continue with my mortgage plan and renew with 5 year Open Variable rate Prime + 1.8% = 5.75 this will still allow me to pay off the mortgage anytime without penalty.

Appreciate any advice.
I would advise against the HELOC. The best variable mortgage rate is Prime -1.24% and it carries a 3 month interest penalty. That's 1.74% lower that the HELOC. If you're going to be breaking the mortgage tomorrow, then sure, take the HELOC. But if you're thinking about buying a house in a year's time, I would just make sense to take the mortgage (25% of the interest rate for the penalty is lower than the 1.74% interest rate spread).

Of course, you may be able to port the mortgage penalty-free to the new property, so it makes even more sense to take a mortgage.

You can do a sensitivity analysis to see when the breakeven is based on time.
Kevin Somnauth, CFA
Principal Broker - First Toronto Mortgage - MA (Ontario #13176, BC #X301007)
Real Estate Salesperson - Century 21 Innovative
President's Club Award Winner At The Mortgage Architects
Deal Fanatic
User avatar
Feb 2, 2014
7356 posts
1861 upvotes
Toronto
stasik wrote: Has anyone heard of RFA mortgage? Any issues etc?

Also, for reference for other folks, here are the best rates i've been able to get on 700k property with 20-40% down as of last Fri. This is a mix of rates obtained from Dash, True North and Canwise.
Variable (no bona fide sales clause)
20% down 2.95%
35% down 2.75%
Fixed (no bona fide sales clause)
20% down 3.64%
25-30% down 3.59%
35% down 3.44%

with $500 cash back.

(If anyone knows any better, please let me know by Monday!)

Still deciding whether to take a chance and go variable or hedge and stay fixed and if the slightly lower rates are worth putting more $ down (vs investing elsewhere)...
The variable rates are correct. Fixed rates are high.

Best fixed rates are 3.59% 5-year fixed with 20% down, 3.39% with 30% down and 3.34% 5-year fixed with 35% down.
Kevin Somnauth, CFA
Principal Broker - First Toronto Mortgage - MA (Ontario #13176, BC #X301007)
Real Estate Salesperson - Century 21 Innovative
President's Club Award Winner At The Mortgage Architects
Deal Fanatic
Feb 29, 2008
9289 posts
4387 upvotes
Question for the pros here....

precon home will be completed in 2020/2021. It will be my primary when done. Require $100K over the course of 6 months paid to builder. I don't have $100k liquid. My plan...

Take some equity out of primary property (say $50K) to pay the DP. In 2 years, sell current primary. Use $ from sale to pay off HELOC...get mortgage for new property (20-30%down).

Am I living in a dreamworld or is this possible? Or should I be going about this a different way? I'm trying to avoid selling any property so I can build more equity.

Paying HELOC early would result in penalties would it not?

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