Real Estate

The Official Mortgage Rates Thread

  • Last Updated:
  • Apr 20th, 2019 7:00 pm
Deal Addict
User avatar
Sep 13, 2011
4392 posts
1475 upvotes
Toronto
Beefeater wrote:
Feb 11th, 2019 4:06 pm
Are you guys recommending to pick the 5 yr fixed mortgage rate (3.29%), because there is only a small difference from the 5 yr variable mortgage rate (2.80%)?
Whether to go fixed or variable really depends on the person. When taking variable, you have to be comfortable with the fact that your rate and your payment could increase at any time. There are 8 rate announcements per years by the Bank of Canada. We have now seen five increases to prime rate since July, 2017. It has been predicted that prime rate was expected to increase at least two more times this year, perhaps even by the summer. With new economic uncertainty created by the announcement of the GM plant closing in Ontario, and the oil situation in Alberta, the BOC may not increase rates as quickly as they were hoping too. Even if they were to move forward with their planned increases, we could then expect to see it level off, or even start to drop back down again. It would be quite a rare situation for us to go the next 5 years without seeing any decreases and chances of that happening would be quite minimal. In fact, it’s extremely unlikely and it would be unprecedented.

The above is all speculation and anything can happen. In the period between September 2010 and July 2017, one of the longest streaks in history without an increase to prime rate, every year leading economists were predicting that prime rate would increase 'next year'. However that never happened until 2017. In fact, it ended up decreasing. Twice. Anything can happen here.

Even if prime rate were to increase this year to the point where it goes up above the fixed rate you would be offered today, that doesn't mean you would be losing. Not at all. You would just start to give back some of your savings. You wouldn't know until the end of the 5 year period if you came out ahead. Again, it would be an unlikely scenario for us to go the next 5 years without seeing any decreases.

Over the past 30 years, people have typically come out ahead with variable rate. This doesn't mean they ALWAYS come out ahead with variable however. The question is, how would you feel if your rate and payment were to increase within the next few months? and then again a few months later? These are things that you have to be comfortable with when taking a variable rate. If you will feel anxiety at the thought, then a fixed rate might be a better option. The best choice isn’t always the one that saves you the most amount of money, it’s the one that allows you to sleep soundly at night.

All that being said, now that the 5 year fixed rate has come back down to as low as 3.29%, the spread is definitely a lot thinner. Two rate increases and rate would even. Three and it would be higher. As mentioned above, this doesn't necessarily mean you would be losing out. The thinner spread definitely does make fixed an attractive option. As far as which one is better? The better question is which one is better for YOU personally. If you have a higher tolerance for risk, then you may want to consider the variable rate. If you're more risk adverse, then I would suggest going with the fixed option.

Another strategy I often suggest is to go variable, but set the payments to match that of the 5 year fixed option since you were prepared to pay the higher payment anyway. The additional will go straight to your principal and will significantly accelerate the payoff of the mortgage. If you were to take the fixed rate, the difference in payment would be going 100% towards interest.

You can also take it one step further and increase the payment a bit more each year. Also, this way when rates do increase, you’ll already be making a higher payment so you wouldn’t really notice the increase as you are already in ahead of it. You're already making the higher payments and are now ahead of the game. You're increasing your payments when YOU want to and not when you're forced to. This way, YOU are the one in control, not the Bank of Canada. Note that your payment will still increase further when there is a rate increase, however you can easily lower it back down to where it was before so your payment doesn’t need to change.
I’m attaching a calculator you can use to compare fixed with variable to get a better feel for it.

Hope you find this helpful. :)
Paul Meredith
Mortgage Broker, Author
CityCan Financial Corp (lic. 10532)
Deal Addict
User avatar
Sep 13, 2011
4392 posts
1475 upvotes
Toronto
Karma2000 wrote:
Feb 11th, 2019 6:39 pm
Just curious and wanted to ask very knowledgeable people here.
- Does my banks (big Canadian bank) mortgage specialist provide me the best rate offered at their own discretion or is it software calculated.
As in- if i go to another branch say close to work, will I get the same offering? or any one else having similar property gets same BEST offer for renewal.

Reason I ask is am having hard time my bank specialist budge. Who is very polite to say I will forward the file for adjustment but in 30 mins I receive a reply that it can't be done.
- How does one negotiate with the banks? I shared what Ratehub etc. show for other lenders, but no love.
There have been some pretty good responses to your question here. I've had clients sometimes wait over week to get a negative response back from their bank on rate matching. Sometimes they'll match, but often it's a waste of time. Keep in mind also that the penalty to break a fixed rate mortgage with a major bank can be as much as 500% higher than that of most non-bank lenders.
I'm assuming your preference is to be with a major bank? Is there a reason why? In some cases, it makes sense, but there are a lot of myths floating around as well and it would be a shame for you to pay thousands more in interest because of an erroneous belief.
Paul Meredith
Mortgage Broker, Author
CityCan Financial Corp (lic. 10532)
Member
Feb 22, 2011
378 posts
108 upvotes
Hi there,

Renewing in Qc. HELOC mortgage with 0 on the loc.

375k balance after 2 years.

What rates am I looking at ?
What fees are incurred from switching lenders?

Thanks
Deal Addict
User avatar
May 1, 2017
1064 posts
226 upvotes
bobmk2 wrote:
Feb 12th, 2019 8:16 am
Hi there,

Renewing in Qc. HELOC mortgage with 0 on the loc.

375k balance after 2 years.

What rates am I looking at ?
What fees are incurred from switching lenders?

Thanks
Hi there,

If your heloc is part of the same registration as your mortgage, then you'll have a collateral charge mortgage, which typically incurs a fee to transfer. If the heloc is not registered with the mortgage, instead behind it in second position, then you may be able to transfer the mortgage with minimal cost and leave the heloc in second position.

Now, in order to adequately quote you rates, we would need a bit more information about the situation.

- How much is the property worth (approximately)
- what's the remaining amortization?
- Was the mortgage originally or previously insured (did you purchase with less than 20% down)?

The lowest rates in QC are p-1.10% - p-1.15% for a variable rate mortgage, and 3.29% 5 year fixed, but it depends on . the loan to value ratio of the mortgage (which is why we need the approximate value) and whether or not the mortgage was previously insured.

Best,

Connor
_________________________________
Connor Green
Mortgage Agent
Concierge Mortgage Group
#12179
Member
Feb 22, 2011
378 posts
108 upvotes
Thanks for the reply.

Apprx value 550k
Remaining amortization 276 months
Non insured, 20% down
It’s a collateral mortgage.
Deal Addict
User avatar
May 1, 2017
1064 posts
226 upvotes
bobmk2 wrote:
Feb 12th, 2019 8:46 am
Thanks for the reply.

Apprx value 550k
Remaining amortization 276 months
Non insured, 20% down
It’s a collateral mortgage.
No problem at all. In this case you would have p-1.10% available to you for a variable rate and 3.44% 5 years fixed. You could also get the collateral transfer fee covered for you should that be an avenue that you'd like to explore.

Best,

Connor
_________________________________
Connor Green
Mortgage Agent
Concierge Mortgage Group
#12179
Sr. Member
Aug 15, 2013
759 posts
385 upvotes
Guelph
Whats the best fixed and variable available right now?
Mortgage amount-$380k after DP-20%
Insurance and Investment Advisor
Deal Addict
User avatar
May 1, 2017
1064 posts
226 upvotes
dundeal wrote:
Feb 12th, 2019 9:44 am
Whats the best fixed and variable available right now?
Mortgage amount-$380k after DP-20%
Hi there,

The best rate for a purchase with 20% down is 3.44% for a 5 year fixed, and 3.0% 5 year variable.

Best,

Connor
_________________________________
Connor Green
Mortgage Agent
Concierge Mortgage Group
#12179
Jr. Member
Dec 28, 2010
135 posts
26 upvotes
Toronto
PaulMeredith wrote:
Feb 12th, 2019 7:36 am
I'm assuming your preference is to be with a major bank? Is there a reason why? In some cases, it makes sense, but there are a lot of myths floating around as well and it would be a shame for you to pay thousands more in interest because of an erroneous belief.
As someone mentioned here renewal is the path of least resistance. I go in, sign and it's renewed. Whereas in 3years a lot has changed , I might be in more debt , more properties invested and the household income might not be as much as 3yrs back. So in all, going thru a new lender is to start from the beginning. But, I appreciate your straightforwardness and I feel that I should give another lender a shot and for now I am trying that my bank can give me a near rate that I am good with.
Deal Addict
User avatar
May 1, 2017
1064 posts
226 upvotes
Karma2000 wrote:
Feb 12th, 2019 12:04 pm
As someone mentioned here renewal is the path of least resistance. I go in, sign and it's renewed. Whereas in 3years a lot has changed , I might be in more debt , more properties invested and the household income might not be as much as 3yrs back. So in all, going thru a new lender is to start from the beginning. But, I appreciate your straightforwardness and I feel that I should give another lender a shot and for now I am trying that my bank can give me a near rate that I am good with.
Just wanted to touch on this a bit.

Renewing is most certainly the path of least resistance. No question about it. What all borrowers really need to consider is what amount of interest savings over the new term makes it worth it to switch lenders, and forgo a bit of convenience. For some people an interest savings of $3000 is enough, for some people $500 is enough. It will of course vary from person to person. Secondly, when provided with enough time, a transfer is typically painless and quick. Letter of employment, pay stub, mortgage statement, tax bill may be all that's required. A title insurance rep will meet at the borrowers home to finalize things at the borrowers convenience. What that time and small inconvenience is worth to the borrower should factor in to whether or not its worth it to switch. For example, it's typically not worth it to switch with a $100k mortgage balance unless the differential in rates available is very large, as the interest savings may be negligible - probably not worth it.

It's always best to see what the rock bottom rate is that your current lender is willing to offer, see what's available in the market, and make an informed, economic decision. It's never in the borrowers best interest to blindly sign-back a renewal offer.

Best,

Connor
_________________________________
Connor Green
Mortgage Agent
Concierge Mortgage Group
#12179
Penalty Box
User avatar
Feb 2, 2014
6172 posts
1392 upvotes
Toronto
bobmk2 wrote:
Feb 12th, 2019 8:46 am
Thanks for the reply.

Apprx value 550k
Remaining amortization 276 months
Non insured, 20% down
It’s a collateral mortgage.
Keep in mind, since it wasn't mentioned, you do have to cover the legal fees due to the collateral charge. You may also qualify for a better rate than the 3.44% 5-year 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
Feb 11, 2019
2 posts
Hi,

Looking for best rates on the following:

Mortgage amount owing at maturity (or current mortgage amount if unknown):
$226500
Approximate market value: $310,000
Original purchase date (month and year): June, 2016
Did you pay an insurance premium such as CMHC when you purchased the home? (meaning you had less than 20% down payment): Yes

Our credit scores should be very good or excellent

Did you refinance your mortgage since you owned your home? If so, what was the year and month when you did the refinance?: No but mortgage was ported and added to in June 2016 don’t know if that’s the same

Do you have a second component such as a HELOC attached to your mortgage?: No
Current lender: Td

Is this your primary residence or a rental property?: Primary residence
Location: Owen sound
Maturity date: April 2019

Question beyond the rates, how quickly do I need to move if I don’t like rates offered from current provider. I have meeting tomorrow to discuss.

Thanks in advance
Newbie
Mar 26, 2008
50 posts
11 upvotes
Mississauga
Renewal coming up in June, looking for some quotes 5 yrs fixed&variable. TIA

Home value: Approximately $750,000
Mortgage left: $280,000
Primary residence or rental property: Primary
Household income: $110,000
Credit: 831
Location: Toronto
Renewal date: June 15, 2019
Penalty Box
User avatar
Feb 2, 2014
6172 posts
1392 upvotes
Toronto
takky wrote:
Feb 12th, 2019 10:05 pm
Renewal coming up in June, looking for some quotes 5 yrs fixed&variable. TIA

Home value: Approximately $750,000
Mortgage left: $280,000
Primary residence or rental property: Primary
Household income: $110,000
Credit: 831
Location: Toronto
Renewal date: June 15, 2019
2.80% 5-year variable and 3.29% 5-year fixed are the best rates for your renewal.
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
Feb 11, 2019
2 posts
Sorry I should have added that house hold income is $120,000 and looking at 5 year fixed

Top

Thread Information

There is currently 1 user viewing this thread. (1 member and 0 guests)

Pickupjr