Real Estate

The Official Mortgage Rates Thread

Newbie
Nov 12, 2018
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PaulMeredith wrote: The New to Canada program applies to guaranteed, salaried income only unfortunately. How much do you have available for down payment? It's possible that HSBC may have a program that could still qualify you given your situation, however pretty much all the no income qualification programs for newcomers were eliminated in 2018. Have you already applied to HSBC and they have conformed you will qualify? Or was this just something you read about online?
All done pre approved.
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Feb 2, 2014
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Splader1751 wrote: Extremely helpful. Appreciate you taking the time to help.
  1. So the order of operations is:
  2. Get pre-approved
  3. Go mortgage shopping (i.e. use this thread or go to a broker) - Do most people offer you a rate pending the acceptance of your offer on the house?
  4. Sign the offer with a financing condition
  5. This part is a little unclear to me: When the conditional offer is (hopefully) accepted, reach out to a broker/someone on this board to secure a rate? How does that work exactly?
Also, for people in a similar situation, why would you sign an offer without a financing condition? Is it because people are just happy with their pre-approved rate from the bank? But even still, these pre-approved rates are not guaranteed, right? So what's the incentive for no financing condition?

Finally, closing date is in may (more than the standard 90 days away, which is the validity of most mortgages). Is this problematic at all?

Thanks again for your help
You've mixed up 3&4.

You get pre-approved so you know what you can afford for a property. You go house shopping with your realtor. After you have an accepted offer, you can go mortgage rate shopping.
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
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Jan 31, 2019
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CdnRealEstateGuy wrote: You've mixed up 3&4.

You get pre-approved so you know what you can afford for a property. You go house shopping with your realtor. After you have an accepted offer, you can go mortgage rate shopping.
Thank you for clarifying. That makes perfect sense now.
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Sep 13, 2011
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rubssingh wrote: All done pre approved.
Okay, fantastic. That is where you will be getting your mortgage from then as no other A lender will approve you for the reasons i've explained. Just make sure that they 100% understand your situation and are fully aware that you your income is 100% commission based with only 1 year history in Canada. I would double check everything with them just to ensure they have not missed anything.

Good luck!
Paul Meredith
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CityCan Financial Corp (lic. 10532)
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May 28, 2014
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Alliston, ON
Renewal coming up March 2019. Just looking for a simple renewal but 25 years amortization. Please feel free to PM me with rates as well.

I am looking 5 year fixed.

How much is the mortgage owing? $520,000
Roughly, what is the current market value of the property? $1.2 mil
Which city is the property located in? Markham, ON
Is the property owner-occupied or a rental? Owner-Occupied
Who is your current lender? Meridian
Do you have a HELOC tied to the mortgage? No
Is the mortgage CMHC insured? No
When did you buy the property? March 2016
When is your renewal date? March 9th 2019
Current Income: 100,000
Deal Addict
Nov 26, 2011
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Are any brokers available to do a pre-approval or should pre-approval be done at a bank.
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Jan 31, 2018
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moizbqm wrote: Renewal coming up March 2019. Just looking for a simple renewal but 25 years amortization. Please feel free to PM me with rates as well.

I am looking 5 year fixed.

How much is the mortgage owing? $520,000
Roughly, what is the current market value of the property? $1.2 mil
Which city is the property located in? Markham, ON
Is the property owner-occupied or a rental? Owner-Occupied
Who is your current lender? Meridian
Do you have a HELOC tied to the mortgage? No
Is the mortgage CMHC insured? No
When did you buy the property? March 2016
When is your renewal date? March 9th 2019
Current Income: 100,000
At renewal is your remaining amortization 25yrs ? You must go with the remaining amortization to be eligible
for best rates.

See below:

3.44% 5 yr fixed

2.80% or prime -1.15% 5 yr variable

Phil
Phil Cragg
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Mortgage Outlet Inc Broker License #12628
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masoud100 wrote: Are any brokers available to do a pre-approval or should pre-approval be done at a bank.
Any of the brokers that post on a regular basis myself,Paul,Kevin,Connor or Andre can handle a preapproval for you

Phil
Phil Cragg
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Dec 18, 2011
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Hello,

New first-time owner with finance in Ontario. Have a couple pre-approvals and I'd like to compare and shop for better rates or allowance.

- What is the target purchase price? 1.15 mil
- How much is the down payment ready? 500k
- Where will the target property be located? Richmond Hill
- Will the property be owner-occupied or a rental? Owner occupied
- Family gross income: 200,000

Thank you!
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stevofolife wrote: Hello,

New first-time owner with finance in Ontario. Have a couple pre-approvals and I'd like to compare and shop for better rates or allowance.

- What is the target purchase price? 1.15 mil
- How much is the down payment ready? 500k
- Where will the target property be located? Richmond Hill
- Will the property be owner-occupied or a rental? Owner occupied
- Family gross income: 200,000

Thank you!
Rates won't be quite as good with the purchase price being over a million unfortunately, regardless of the actual mortgage amount. Lowest 5 year fixed would be 3.54% or 5 year variable at prime -0.75% (3.20%).
Paul Meredith
Mortgage Broker, Author
CityCan Financial Corp (lic. 10532)
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Sep 13, 2011
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moizbqm wrote: Renewal coming up March 2019. Just looking for a simple renewal but 25 years amortization. Please feel free to PM me with rates as well.

I am looking 5 year fixed.

How much is the mortgage owing? $520,000
Roughly, what is the current market value of the property? $1.2 mil
Which city is the property located in? Markham, ON
Is the property owner-occupied or a rental? Owner-Occupied
Who is your current lender? Meridian
Do you have a HELOC tied to the mortgage? No
Is the mortgage CMHC insured? No
When did you buy the property? March 2016
When is your renewal date? March 9th 2019
Current Income: 100,000
As Phil had mentioned, your maximum amortization based on your original amortization, less years past on the calendar. So if you started with 30 years, and three years has past, then your maximum amortization would be 27 years. You can always go lower, you just can't increase. If you started out with 25 years, then your maximum would be 22 years. This is regardless of effective amortization, which is your amortization based on any additional payments made, including accelerated biweekly/weekly payments.

Options may be a little more limited in your situation given the ratio of your mortgage amount to your income. Best to reach out to a broker to find out exactly what your options will be.
Paul Meredith
Mortgage Broker, Author
CityCan Financial Corp (lic. 10532)
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Feb 2, 2014
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moizbqm wrote: Renewal coming up March 2019. Just looking for a simple renewal but 25 years amortization. Please feel free to PM me with rates as well.

I am looking 5 year fixed.

How much is the mortgage owing? $520,000
Roughly, what is the current market value of the property? $1.2 mil
Which city is the property located in? Markham, ON
Is the property owner-occupied or a rental? Owner-Occupied
Who is your current lender? Meridian
Do you have a HELOC tied to the mortgage? No
Is the mortgage CMHC insured? No
When did you buy the property? March 2016
When is your renewal date? March 9th 2019
Current Income: 100,000
2.80% 5-year variable (Prime -1.15%) and 3.39% 5-year fixed are the best rates for your transfer.
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
Newbie
Dec 18, 2011
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TORONTO
PaulMeredith wrote: Rates won't be quite as good with the purchase price being over a million unfortunately, regardless of the actual mortgage amount. Lowest 5 year fixed would be 3.54% or 5 year variable at prime -0.75% (3.20%).
Is there a reason why rates won't be good with purchase price of a million+ ?
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stevofolife wrote: Is there a reason why rates won't be good with purchase price of a million+ ?
The rates quoted are still great, and lower than you can get with any major bank. They are just not quite as good as what can be found if the purchase price of under $1 million. But why? That's a very good question, and here is the answer.

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). Securitization can reduce a lender's cost of funds, 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 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. This next point won't apply to you personally, but will be of help to others. 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 rate is prime -0.95% (3.00%). With 35%, it drops to prime -1.15% (2.80%).
In many cases, it can be even lower if the down payment is less than 20% and therefore CMHC insured. It all comes down to the cost of funds to that lender.

Uninsurable rates, as mentioned, start at 3.54% for a 5 year fixed or prime -0.75% (3.20%) for 5 year variable.

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 Meredith
Mortgage Broker, Author
CityCan Financial Corp (lic. 10532)
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Feb 29, 2008
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Question. What are the differences between buying property over $1M vs under $1M What are the extra costs if any? I'm looking in the $1M range but if I can save money and/or headaches by looking under $1M I'm all ears.

It seems there's a big difference between a 9.5M home and a 1.05M home.

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