Real Estate

The Official Mortgage Rates Thread

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Sep 13, 2011
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stevofolife wrote:
Feb 3rd, 2019 1:34 am
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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moizbqm wrote:
Feb 2nd, 2019 2:55 pm
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
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CityCan Financial Corp (lic. 10532)
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moizbqm wrote:
Feb 2nd, 2019 2:55 pm
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
Mortgage Broker - Mortgage Architects (#10287) and Real Estate Salesperson - Century 21 Innovative
President's Club Award Winner At The Mortgage Architects
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PaulMeredith wrote:
Feb 3rd, 2019 8:09 am
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:
Feb 3rd, 2019 9:36 am
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
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CityCan Financial Corp (lic. 10532)
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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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JayLove06 wrote:
Feb 3rd, 2019 3:56 pm
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.
You have to put at least 20% down for a million dollar purchase and rates will be higher as Paul mentioned.
Kevin Somnauth, CFA
Mortgage Broker - Mortgage Architects (#10287) and Real Estate Salesperson - Century 21 Innovative
President's Club Award Winner At The Mortgage Architects
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JayLove06 wrote:
Feb 3rd, 2019 3:56 pm
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.
Most of this was answered in my post directly above yours. Pricing for a home with a purchase price of $999,999 or less will be lower than one with a purchase price of $1,000,000 or greater. There are no extra headaches or any other additional costs other than a slightly higher rate. Really, what should be most important is buying the home you love, even if the rate might be a little higher.
Paul Meredith
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CityCan Financial Corp (lic. 10532)
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Jan 16, 2019
2 posts
Hi All,

Looking for some advice as I am first-time home buyer, Please help!!
Mortgage: 649,000$
Which city is the property located in? Vaughan, ON
Is the property owner-occupied or a rental? Owner-Occupied
Is the mortgage CMHC insured? yes
Closing date property? Feb 27th 2019
Current Income including spouse: 160,000 $

As of now National bank is giving me 3.34 fixed rate for 5 yrs which is approved, but got to know hsbc with cmhc insured is giving @3.24% is it best to stick on to NB or try HSBC given the short duration?
Also will it affect the already approved loan?
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sudivand wrote:
Feb 3rd, 2019 8:41 pm
Hi All,

Looking for some advice as I am first-time home buyer, Please help!!
Mortgage: 649,000$
Which city is the property located in? Vaughan, ON
Is the property owner-occupied or a rental? Owner-Occupied
Is the mortgage CMHC insured? yes
Closing date property? Feb 27th 2019
Current Income including spouse: 160,000 $

As of now National bank is giving me 3.34 fixed rate for 5 yrs which is approved, but got to know hsbc with cmhc insured is giving @3.24% is it best to stick on to NB or try HSBC given the short duration?
Also will it affect the already approved loan?
You can definitely switch lenders as you are not committed until you sign with your lawyers office. With National Bank, you would have a collateral charge mortgage, which would mean there are some additional fees to switch at the end of your term. Legal and appraisal fees, in addition to your discharge fee. These fees amount to around $1,400 in total. There are more and more lenders now that will cover some, or even all of these for you, however options may be a bit more limited and you may pay a slightly higher rate to have ALL fees covered.

Big banks (including HSBC) also have the harshest penalties of all mortgage lenders should you find yourself in a position where you need to break the mortgage early. Penalty can be as much as 500% more than most non-bank lenders (this applies to fixed mortgage rates only).

Lowest rates through brokers right now would be 3.29% for a 5 year fixed.
Paul Meredith
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CityCan Financial Corp (lic. 10532)
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sudivand wrote:
Feb 3rd, 2019 8:41 pm
Hi All,

Looking for some advice as I am first-time home buyer, Please help!!
Mortgage: 649,000$
Which city is the property located in? Vaughan, ON
Is the property owner-occupied or a rental? Owner-Occupied
Is the mortgage CMHC insured? yes
Closing date property? Feb 27th 2019
Current Income including spouse: 160,000 $

As of now National bank is giving me 3.34 fixed rate for 5 yrs which is approved, but got to know hsbc with cmhc insured is giving @3.24% is it best to stick on to NB or try HSBC given the short duration?
Also will it affect the already approved loan?
3.29% 5-year fixed or 2.75% 5-year variable.

I would very much consider variable. Lower rate, better penalty calculation and it’s convertible to fixed!
Kevin Somnauth, CFA
Mortgage Broker - Mortgage Architects (#10287) and Real Estate Salesperson - Century 21 Innovative
President's Club Award Winner At The Mortgage Architects
Newbie
Jun 15, 2013
2 posts
Toronto
Can my partner and I get an approval for a new purchase from one of the brokers here?
I have been at my current job for almost 3 months and probation is 6 months. My previous employment was in the same industry for last 5 years, same role (public sector). My partner has been at his job for 4.5 years.
My income: 81K. Partner income: 65K.

-Purchase price: $640,000
-How much is the down payment? 25% ($160,000)
-Where it the property located? ON
-When is the closing date? March
-Will the property be owner-occupied or a rental? Owner occupied
Newbie
Aug 30, 2016
2 posts
Montreal
Hello,

Long time reader of RFD, first time posting in the mortgage thread. Renewal coming up May 2019. Looking to refinance current property to fund a purchase on a new home (offer accepted). Please feel free to PM me with rates as well.

REFINANCE:
- How much is the mortgage owing? 310k
- Roughly, what is the current market value of the property? 480k
- Which city is the property located in? Brossard, QC
- Is the property owner-occupied or a rental? Owner occupied, but will convert to rental
- Who is your current lender? Desjardins
- Do you have a HELOC tied to the mortgage? yes (unused)
- Is the mortgage CMHC insured? Yes
- When did you buy the property? May 2014
- When is your renewal date? May 2019

PURCHASE:
- What is the target purchase price? 470k (offer accepted)
- How much is the down payment ready? With refinance, 20%
- Where will the target property be located? Montreal, QC
- Will the property be owner-occupied or a rental? Owner occupied
- Family gross income: 175k

Thank you
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Nov 26, 2011
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Thank you Phill Cragg for the response. How can I go about getting a pre-approval from you? Are the rates going to be presented to me during pre-approval or later? Also had another question for the forum if anyone can chip in. Say I am getting a new build. Is there any Ontario Land Transfer tax on a new build or is it just the HST which is already included in the new build price.

Thanks
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Jan 31, 2018
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masoud100 wrote:
Feb 4th, 2019 2:15 am
Thank you Phill Cragg for the response. How can I go about getting a pre-approval from you? Are the rates going to be presented to me during pre-approval or later? Also had another question for the forum if anyone can chip in. Say I am getting a new build. Is there any Ontario Land Transfer tax on a new build or is it just the HST which is already included in the new build price.

Thanks
Sent you information
Phil Cragg
Mortgage Broker
Mortgage Outlet Inc Broker License #12628

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