Real Estate

The Official Mortgage Rates Thread

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Apr 21, 2004
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PaulMeredith wrote:
Dec 28th, 2018 9:13 am

An insurable mortgage must meet the following criteria:

- Value of home must be under $1 million (applies only if home was purchased after November 30th, 2016).
- Maximum 25 year amortization
- Purchases or switches only (no refinances)
- Owner occupied property

The last three points are fairly straightforward, but let me touch on the first one for a moment as there are some exceptions. Let's say you purchased your home for $850,000 in 2014 for example, and it is now worth $1,100,000. When that mortgage comes up for renewal, this could be processed as an insurable loan, meaning you can get lowest rates. This is because you had purchased the home prior to November 30th, 2016, which is the date these new mortgage regulations took effect. However, if you had refinanced he home after November 30th, 2016, then this mortgage would no longer be insurable. Therefore, the higher uninsurable rates would apply.

Any uninsurable mortgage would be any of the following:

- Any mortgage on a purchase / property value over $1 million
- 30 year year amortization
- Refinances and rental properties

Hope this helps bring some clarity as to how mortgage rates are quoted. I know this can get pretty confusing, but that's what we are here for :)
Paul, what if we refinanced in 2015 and lost our CMHC insurance as a result because the property value appreciated where LTV was now below 80%? I'm not sure if we lost the CMHC insurance as a result of refinancing at another lender and not sure how I can find out.

In any case, does this mean if we want to switch lenders, we can opt for an insurable loan/mortgage to get a lower mortgage rate? It may make sense if the CMHC surcharge is very minimal based on the LTV as at renewal?
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Aug 14, 2007
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Ottawa
PaulMeredith wrote:
Dec 28th, 2018 9:13 am
Lowest 5 year fixed would be 3.59% or 5 year variable at prime -0.75% (3.20%). The reason rates are higher than what others are being offered on this board is due to the purchase price being over $1 million. It doesn't matter if the mortgage amount is under $1 million. Purchase price is the only thing that matters in this case.

I know it doesn't seem to make a lot of sense. After all, you are putting 60% down, so why wouldn't you get the lower rate? It has to due with the cost of funds to the lender. Any property with a purchase price over $1 million will be an uninsurable mortgage for that lender, therefore it falls into a different pricing category. Let me further explain.

After new mortgage regulations took effect on November 30th, 2016, mortgages are now placed into two categories. Insurable and uninsurable. Most mortgage lenders will buy bulk portfolio insurance of their mortgages through one of the three mortgage insurers (such as CMHC), regardless of how much you have for down payment. This allows them to securitize the loan (meaning, break it up into smaller pieces, or bundle complete loans together and then sell them off as mortgage backed securities). The lenders ability to do this reduces the cost of funds to that lender, which is a savings they can pass on to the borrower in the form of a lower rate. This is what is referred to as an 'insurable' mortgage.

An insurable mortgage must meet the following criteria:

- Value of home must be under $1 million (applies only if home was purchased after November 30th, 2016).
- Maximum 25 year amortization
- Purchases or switches only (no refinances)
- Owner occupied property

The last three points are fairly straightforward, but let me touch on the first one for a moment as there are some exceptions. Let's say you purchased your home for $850,000 in 2014 for example, and it is now worth $1,100,000. When that mortgage comes up for renewal, this could be processed as an insurable loan, meaning you can get lowest rates. This is because you had purchased the home prior to November 30th, 2016, which is the date these new mortgage regulations took effect. However, if you had refinanced he home after November 30th, 2016, then this mortgage would no longer be insurable. Therefore, the higher uninsurable rates would apply.

Any uninsurable mortgage would be any of the following:

- Any mortgage on a purchase / property value over $1 million
- 30 year year amortization
- Refinances and rental properties

Insurable rates can also vary based on the down payment / equity amount as well. For example, with a 20% down payment, the lowest 5 year variable would be prime -1.05% (2.90%). With 35%, it drops to prime -1.24% (2.71%)
If you had LESS than 20% and therefore CMHC insured, then rates change once again, with lowest 5 year variable rate being prime -1.25% (2.70%). An uninsurable mortgage would be prime -0.75% (3.20%) at best right now, with rates being even higher for rental properties.

Hope this helps bring some clarity as to how mortgage rates are quoted. I know this can get pretty confusing, but that's what we are here for :)
I was wondering why people with low down payment get better rate than people who can pay 20% down payment. It makes so much sense now, thanks for information! Electric Light Bulb
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Sep 13, 2011
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alanbrenton wrote:
Dec 28th, 2018 11:18 am
Paul, what if we refinanced in 2015 and lost our CMHC insurance as a result because the property value appreciated where LTV was now below 80%? I'm not sure if we lost the CMHC insurance as a result of refinancing at another lender and not sure how I can find out.

In any case, does this mean if we want to switch lenders, we can opt for an insurable loan/mortgage to get a lower mortgage rate? It may make sense if the CMHC surcharge is very minimal based on the LTV as at renewal?
You lost the CMHC insurance when you did the refinance, not because of the change in LTV.
Can you let me know how much you owe on the mortgage now and the approximate value of the home?
Paul Meredith
Mortgage Broker, Author
CityCan Financial Corp (lic. 10532)
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noobienoob wrote:
Dec 28th, 2018 11:11 am
Hi all -

Looking for either 5 year variable or 5 yr fixed for first house purchase (first time home ubyer)

-Purchase Price? ~$750k
-Downpayment? 270k > 35% downpayment
-Mortgage - 480k
-Which city is the property located in? Markham
-Is the property owner-occupied or a rental? Owner-occupied
-Closing date? Jan/Feb 2019
-Credit rating: High 700s

Thanks in advance!
2.71% 5-year variable and 3.44% 5-year fixed are the best rates available to you.
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
PLATINUM CLUB Award Winner At Century 21 Innovative
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For people looking into switching lenders prior to renewal, it probably makes sense to use prepayment privileges to lower the total principal and therefore increase the chances of passing the B20 Stress Test, correct?

So is it Bank Prime Rate + 2.0% that I use in a mortgage calculator.
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Nov 8, 2009
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Hi all -

Looking for either 5 year variable or 5 yr fixed for first condo purchase (first time home buyer)

-Purchase Price? ~$600k
-Downpayment? 100-120k > 15-20% downpayment
-Mortgage - 480-500k
-Which city is the property located in? DT Toronto
-Is the property owner-occupied or a rental? Owner-occupied
-Closing date? march/apr 2019
-Credit rating: High 700s

Thanks in advance!
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Feb 2, 2014
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alanbrenton wrote:
Dec 28th, 2018 2:18 pm
For people looking into switching lenders prior to renewal, it probably makes sense to use prepayment privileges to lower the total principal and therefore increase the chances of passing the B20 Stress Test, correct?

So is it Bank Prime Rate + 2.0% that I use in a mortgage calculator.
No. Greater of BoC posted rate (5.34%) or contract rate +2.00%.
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
PLATINUM CLUB Award Winner At Century 21 Innovative
Newbie
Dec 27, 2018
1 posts
Hello,

Looking to Renew my mortgage soon, looking at 5 year variable or fixed rates on my condo

How much is the mortgage owing? ~$324k (at renewal)
-what is the current market value of the property? ~$385k
-Which city is the property located in? Calgary, Alberta
-Is the property owner-occupied or a rental? Property owner-occupied
-Do you have a HELOC tied to the mortgage? No
-Current Rate? 3.19% Fixed
-Is the mortgage CMHC insured? Yes
-When is your renewal date? Mar 27 2019
-Credit rating: 800+

One other thing. When I originally purchased my parents co-signed, as I was doing straight contract work and couldn't get approved by the lender without a co-signer, now I'm a full-time employee, My parents (now retired) want to come off the mortgage and my Wife would take their place. I'm wondering how hard of a process this would be at renewal with a new lender?

Thank you!
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Sep 4, 2018
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Happy holidays all!
We just sold our condo and bought a townhouse. Was a rushed deal as this is a move we have wanted to do for a while and the price on the new place was drastically discounted.
Currently we have $280000 outstanding on our mortgage with First National, renewed this past August for 5 years fixed at 3.4%. 25 year amortization.
We will have $200000 to put down on the new place, price before down payment is $725000.
We want the monthly payments to be as low as possible. In 2 years our situation will change dramatically and we will be able to pay much more. But for the next two years things will be tight.
Does it make sense to do a 30 year amortization?
First National’s opening offer was current rate on existing balance, 3.8% on new balance, 5 year fixed 25 year.
We are not concerned about qualifying based on our income, credit scores and if necessary relatives who could co-sign.
Will talk to a broker but wanted to get advice here first. Thank you for any replies!
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clubsoda1664 wrote:
Dec 28th, 2018 3:19 pm
Hello,

Looking to Renew my mortgage soon, looking at 5 year variable or fixed rates on my condo

How much is the mortgage owing? ~$324k (at renewal)
-what is the current market value of the property? ~$385k
-Which city is the property located in? Calgary, Alberta
-Is the property owner-occupied or a rental? Property owner-occupied
-Do you have a HELOC tied to the mortgage? No
-Current Rate? 3.19% Fixed
-Is the mortgage CMHC insured? Yes
-When is your renewal date? Mar 27 2019
-Credit rating: 800+

One other thing. When I originally purchased my parents co-signed, as I was doing straight contract work and couldn't get approved by the lender without a co-signer, now I'm a full-time employee, My parents (now retired) want to come off the mortgage and my Wife would take their place. I'm wondering how hard of a process this would be at renewal with a new lender?

Thank you!
Rates start at 2.75% 5-year variable, but there are some extra steps involved if you want to change owners on title.
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
PLATINUM CLUB Award Winner At Century 21 Innovative
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Feb 2, 2014
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ToriW77221 wrote:
Dec 28th, 2018 3:51 pm
Happy holidays all!
We just sold our condo and bought a townhouse. Was a rushed deal as this is a move we have wanted to do for a while and the price on the new place was drastically discounted.
Currently we have $280000 outstanding on our mortgage with First National, renewed this past August for 5 years fixed at 3.4%. 25 year amortization.
We will have $200000 to put down on the new place, price before down payment is $725000.
We want the monthly payments to be as low as possible. In 2 years our situation will change dramatically and we will be able to pay much more. But for the next two years things will be tight.
Does it make sense to do a 30 year amortization?
First National’s opening offer was current rate on existing balance, 3.8% on new balance, 5 year fixed 25 year.
We are not concerned about qualifying based on our income, credit scores and if necessary relatives who could co-sign.
Will talk to a broker but wanted to get advice here first. Thank you for any replies!
3.44% 5-year fixed and 2.85% 5-year variable are the best rates with 25% - 29.99% down.

You will have to pay First National’s penalty to break their current mortgage when the sale closes.
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
PLATINUM CLUB Award Winner At Century 21 Innovative
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Jan 31, 2018
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linske wrote:
Dec 28th, 2018 2:40 pm
Hi all -

Looking for either 5 year variable or 5 yr fixed for first condo purchase (first time home buyer)

-Purchase Price? ~$600k
-Downpayment? 100-120k > 15-20% downpayment
-Mortgage - 480-500k
-Which city is the property located in? DT Toronto
-Is the property owner-occupied or a rental? Owner-occupied
-Closing date? march/apr 2019
-Credit rating: High 700s

Thanks in advance!
Rates can be as low as 3.29% on the 5 yr fixed with less than 20% down

Variable side you are looking at prime - 1.20% or 2.75%

Phil
Phil Cragg
Mortgage Broker
Mortgage Outlet Inc Broker License #12628
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Mar 4, 2007
393 posts
37 upvotes
Calgary
Hi all,

Looking at building a new home. The final price will be in the $640-$660k range. Looking at both variable and fixed rates options. Also, just wondering if it makes sense to go with the lower rate and putting less than 20% down? My brother had shown me a spreadsheet where it showed that with the lesser than 20% down payment and a lower interest rate that the monthly payments were negligible even with the higher amount of money borrowed(including the CMHC fees). Just trying to understand why some people go this route.

-Purchase Price? ~$650k
-Downpayment? 15-20%
-Which city is the property located in? Calgary., Alberta
-Closing date? Next 3 months
-Credit rating: High 700s

Thanks in advance!
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Feb 29, 2008
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@Siralex Keep in mind in order to go 30 year amm, you have to put down minimum of 20%. If you don'r mind 25 year ammortization then you're good to go.

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