Real Estate

The Official Mortgage Rates Thread

Deal Addict
Dec 28, 2007
4176 posts
2582 upvotes
Looking for 5 year variable or fixed rate for a rental property in Greater Vancouver area.

$375,000 purchase price
$150,000 down

Still have $375,000 owing on primary residence.
Newbie
Jan 7, 2013
5 posts
Our mortgage renewal is coming up this September.
We are trying to decide if we should add to our loan and refinance for home improvements or renew and use our two existing LOCs (35k unused, 7%). Looking for 5 yr variable. What’s the best rate for renewal or refinance? With only 6 months left, is it better to wait closer to maturity date to renew/refinance?
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Sep 13, 2011
4792 posts
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Toronto
jchung513 wrote:
Feb 16th, 2019 3:08 am
Our mortgage renewal is coming up this September.
We are trying to decide if we should add to our loan and refinance for home improvements or renew and use our two existing LOCs (35k unused, 7%). Looking for 5 yr variable. What’s the best rate for renewal or refinance? With only 6 months left, is it better to wait closer to maturity date to renew/refinance?
Lowest 5 year variable for refinancing would be prime -0.75%. If you are just simply renewing, rates range from prime -1.20% (2.75%) to prime -0.95% (3.00%). For the prime -1.20%, your original mortgage would have needed to be insured with CMHC, Genworth or Canada Guaranty). If you have 35% or greater equity in the property, which is the case with the majority of switches, rate would be prime -1.15% 2.80%). For these rates, the value of the home needs to be under $1 million, OR you purchased the home prior to November 30th, 2016. It can get complicated, which is why we ask so many questions before we quote rates. Maximum rate hold on switches is also only 90 days for the most part, so the rates that are available today may not be available when it's time for you to switch.

As there is such a large spread between the refinancing rate and straight switch rate, and if your $35,000 in LOCs will cover the renos, then doing a simple switch and tapping into the LOC for the renovations would likely be a good choice, but there is another option as well.

You could consider adding a HELOC in 2nd position behind your current lender. Usually there is a set up charge of around $1,000 (legal and appraisal) to set up a HELOC. Manulife however should have no problem going in behind your current lender with a HELOC, and they will typically cover all the fees... however they have a $17 per month fee whether you use it or not. Manulife is only a good option when you have been in your mortgage for at least 1-2 years. If you were to try to add it fresh after switching, they will typically not offer it to you (contrary to how they did things in the past). Rate on HELOCs is usually prime +0.50% (4.45%), so you would need to weigh out the costs of using your LOC vs. adding a HELOC. Keep in mind that when it comes time to discharge the HELOC, there will also be a discharge fee of around $300. The difference between the 4.45% on the HELOC and the 7% on your LOC is 2.55%, or just over $74 per month on a $35,000 LOC.

That gives you a few things to think about and hopefully this will help you to determine the course of action best suited to you and your family.
Paul Meredith
Mortgage Broker, Author
CityCan Financial Corp (lic. 10532)
Newbie
Jul 4, 2018
8 posts
I want to get a HELOC on my house. I bought in 2007 with TD. I got a cash back loan. Now I owe $173k. I'm in Oakville Ontario. 2 bedroom condo. Similar units are selling for 400k. We would like a line of credit for 50k to buy new equipment for our business. Household income is around 70k. Who should I talk to?
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Sep 13, 2011
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Lessjunkremovel wrote:
Feb 16th, 2019 10:21 am
I want to get a HELOC on my house. I bought in 2007 with TD. I got a cash back loan. Now I owe $173k. I'm in Oakville Ontario. 2 bedroom condo. Similar units are selling for 400k. We would like a line of credit for 50k to buy new equipment for our business. Household income is around 70k. Who should I talk to?
Since your mortgage is currently with TD, TD would be the best lender to speak to. Options are always more limited when adding a HELOC behind a different lender. You may want to speak with Manulife as well. As mentioned in my above post, there are fees of around $1,000 to set up a HELOC. Manulife will typically cover these for you, but they have a $17 per month fee. This gives you an idea of where you can start.
Paul Meredith
Mortgage Broker, Author
CityCan Financial Corp (lic. 10532)
Newbie
Jul 4, 2018
8 posts
How does the qualifications process work? Do they base it on the value of the property? Or do you need to prove you can pass a stress test.
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Sep 13, 2011
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Lessjunkremovel wrote:
Feb 16th, 2019 10:35 am
How does the qualifications process work? Do they base it on the value of the property? Or do you need to prove you can pass a stress test.
It would be the same process as applying for a mortgage. An appraisal would be required to determine the value. The mortgage and HELOC combination can go up to 80% of the appraised value. The HELOC portion alone cannot exceed 65%. You will need to pass the stress test as well.
Paul Meredith
Mortgage Broker, Author
CityCan Financial Corp (lic. 10532)
Newbie
Jul 4, 2018
8 posts
Is there a secondary lender with less restrictions. Must be a easier way. If my property is worth 400k minimum and I owe 173k. I would think lenders would be lined up to lend 50k. Shouldn't a equity loan, be based on the equity. Not someone's ability to pay it back. Its secured on the equity. Maybe I'm wrong.
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Lessjunkremovel wrote:
Feb 16th, 2019 10:52 am
Is there a secondary lender with less restrictions. Must be a easier way. If my property is worth 400k minimum and I owe 173k. I would think lenders would be lined up to lend 50k. Shouldn't a equity loan, be based on the equity. Not someone's ability to pay it back. Its secured on the equity. Maybe I'm wrong.
It's not an equity loan. You still need to qualify, just as with any other mortgage. It doesn't matter how much equity there is in the property, you still need to qualify based on income, credit, etc. If you are concerned about qualifying, then other options do exist, however they are a lot more pricey. Likely a rate of around 10%, plus set up fees which can vary depending on the situation, loan size, etc.
Paul Meredith
Mortgage Broker, Author
CityCan Financial Corp (lic. 10532)
Newbie
Jul 4, 2018
8 posts
Thanks for your help. I guess I have to go in the bank. I think I can qualify. Just seems like a hassle. I'm going to offer a service 1% higher then the banks, but we qualify you in under a hour and do it during a Skype call. Funds available in under a hour.
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Lessjunkremovel wrote:
Feb 16th, 2019 11:28 am
Thanks for your help. I guess I have to go in the bank. I think I can qualify. Just seems like a hassle. I'm going to offer a service 1% higher then the banks, but we qualify you in under a hour and do it during a Skype call. Funds available in under a hour.
There is a reason why that service does not exist ;)
Paul Meredith
Mortgage Broker, Author
CityCan Financial Corp (lic. 10532)
Newbie
Feb 12, 2019
2 posts
Looks like I may have been missing some information

Mortgage amount owing at maturity (or current mortgage amount if unknown): 60k
Approximate market value: 400k
Original purchase date (month and year): 1999
Did you pay an insurance premium such as CMHC when you purchased the home? (meaning you had less than 20% down payment): No
Did you refinance your mortgage since you owned your home? If so, what was the year and month when you did the refinance? No
Do you have a second component such as a HELOC attached to your mortgage? Yes, 50K used
Current lender: BMO
Is this your primary residence or a rental property?: Primary
Location: Montreal, QC
Maturity date: April, 2023

Looking to lower monthly payments, seems like getting a new mortgage for ~110k with a longer term would be an option to consider in that regard?
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ilcravatta wrote:
Feb 16th, 2019 11:47 am
Looks like I may have been missing some information

Mortgage amount owing at maturity (or current mortgage amount if unknown): 60k
Approximate market value: 400k
Original purchase date (month and year): 1999
Did you pay an insurance premium such as CMHC when you purchased the home? (meaning you had less than 20% down payment): No
Did you refinance your mortgage since you owned your home? If so, what was the year and month when you did the refinance? No
Do you have a second component such as a HELOC attached to your mortgage? Yes, 50K used
Current lender: BMO
Is this your primary residence or a rental property?: Primary
Location: Montreal, QC
Maturity date: April, 2023

Looking to lower monthly payments, seems like getting a new mortgage for ~110k with a longer term would be an option to consider in that regard?
With such a small balance (congratulations on that!), and also considering you have a collateral mortgage (HELOC attached), your best bet will be to work with BMO directly. Additional fees would be involved which would make switching cost-prohibitive. If you want to lower payments, you would need to proceed as a refinance to extend your amortization. Note that BMO may charge you additional fees here as well, such as legal and appraisal, but best to ask them what they can do for you. You'll be hard pressed to get competitive rates outside BMO given your situation unfortunately.
Paul Meredith
Mortgage Broker, Author
CityCan Financial Corp (lic. 10532)
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Feb 2, 2014
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jchung513 wrote:
Feb 16th, 2019 3:08 am
Our mortgage renewal is coming up this September.
We are trying to decide if we should add to our loan and refinance for home improvements or renew and use our two existing LOCs (35k unused, 7%). Looking for 5 yr variable. What’s the best rate for renewal or refinance? With only 6 months left, is it better to wait closer to maturity date to renew/refinance?
I wouldn’t refinance for $35k. You have the pay legal fees, appraisal fees and a higher rate. Transfer the mortgage over as is. There are alternative ways to get the $35k at a pretty cheap cost.
Kevin Somnauth, CFA
Owner/Principal Broker - First Toronto Mortgage - Mortgage Architects (#13176)
Real Estate Salesperson - Century 21 Innovative
President's Club Award Winner At The Mortgage Architects
Newbie
Jan 7, 2013
5 posts
PaulMeredith wrote:
Feb 16th, 2019 8:23 am
Lowest 5 year variable for refinancing would be prime -0.75%. If you are just simply renewing, rates range from prime -1.20% (2.75%) to prime -0.95% (3.00%). For the prime -1.20%, your original mortgage would have needed to be insured with CMHC, Genworth or Canada Guaranty). If you have 35% or greater equity in the property, which is the case with the majority of switches, rate would be prime -1.15% 2.80%). For these rates, the value of the home needs to be under $1 million, OR you purchased the home prior to November 30th, 2016. It can get complicated, which is why we ask so many questions before we quote rates. Maximum rate hold on switches is also only 90 days for the most part, so the rates that are available today may not be available when it's time for you to switch.

As there is such a large spread between the refinancing rate and straight switch rate, and if your $35,000 in LOCs will cover the renos, then doing a simple switch and tapping into the LOC for the renovations would likely be a good choice, but there is another option as well.

You could consider adding a HELOC in 2nd position behind your current lender. Usually there is a set up charge of around $1,000 (legal and appraisal) to set up a HELOC. Manulife however should have no problem going in behind your current lender with a HELOC, and they will typically cover all the fees... however they have a $17 per month fee whether you use it or not. Manulife is only a good option when you have been in your mortgage for at least 1-2 years. If you were to try to add it fresh after switching, they will typically not offer it to you (contrary to how they did things in the past). Rate on HELOCs is usually prime +0.50% (4.45%), so you would need to weigh out the costs of using your LOC vs. adding a HELOC. Keep in mind that when it comes time to discharge the HELOC, there will also be a discharge fee of around $300. The difference between the 4.45% on the HELOC and the 7% on your LOC is 2.55%, or just over $74 per month on a $35,000 LOC.

That gives you a few things to think about and hopefully this will help you to determine the course of action best suited to you and your family.

Thank you so much for your feedback and insight. Really appreciate it. I think we will use our LOCs if needed. If we use our LOC, will it affect our renewal due in September? What if we want to apply for a HELOC after the renewal? Does having a HELOC or HELOC application affect greatly on our credit score?

Here is more background info....
Current lender: MCAP 5 yr variable, p-o.85
Mortgage remaining: 410k
Value of property: 1.2m from recent sales history in our area (vancouver, bc, primary residency, purchased in 2009)
Credit score:>850 for both husband and I
Current income: 130k; 180-200k after 2021 (when I will be working more)

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