Real Estate

The Official Mortgage Rates Thread

Sr. Member
Jan 12, 2008
931 posts
196 upvotes
Vancouver
Hi, i hope y'all can help me regarding Mortgage penalties. It was an area i've overlooked when prepping things. I've gone through my mortgage documents that i got from my broker at the time of purchase, but i can't find anything on the penalty calculation. How much do you think it'll end up costing?

I purchased a property that i just ended up hating so i knew i wanted to sell by the time my mortgage term ended. But maybe i made a mistake with the timing? There is about a 3 week difference in the closing date & mortgage term expiry date. During these awful two years, i inherited two other properties and moved into one of those. So i will not be porting the mortgage, straight termination.

Mortgage amount owing at maturity: 330k
Monthly Mortgage Payment: $1343, 2.29% fixed
Original purchase date (month and year): April 19/2017
Mortgage Maturity date: April 19/2019
Current lender: Scotiabank, conventional

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? No

Closing date: March 29/2019

Anyways, i hope i don't get penalized too harshly for 3 weeks difference. I don't even mind paying off the final month, but i doubt they'll let me.
Jr. Member
Jun 8, 2009
108 posts
21 upvotes
Toronto
Three months interest penalty $1890. For exact figures contact Scotia. There’s also a standard discharge fee.

Try to delay the closing, give buyer an incentive if possible.
thefeebster wrote:
Feb 16th, 2019 8:46 pm
Hi, i hope y'all can help me regarding Mortgage penalties. It was an area i've overlooked when prepping things. I've gone through my mortgage documents that i got from my broker at the time of purchase, but i can't find anything on the penalty calculation. How much do you think it'll end up costing?

I purchased a property that i just ended up hating so i knew i wanted to sell by the time my mortgage term ended. But maybe i made a mistake with the timing? There is about a 3 week difference in the closing date & mortgage term expiry date. During these awful two years, i inherited two other properties and moved into one of those. So i will not be porting the mortgage, straight termination.

Mortgage amount owing at maturity: 330k
Monthly Mortgage Payment: $1343, 2.29% fixed
Original purchase date (month and year): April 19/2017
Mortgage Maturity date: April 19/2019
Current lender: Scotiabank, conventional

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? No

Closing date: March 29/2019

Anyways, i hope i don't get penalized too harshly for 3 weeks difference. I don't even mind paying off the final month, but i doubt they'll let me.
Newbie
Feb 22, 2017
2 posts
1 upvote
Hi, need some help in figuring out what my next mortgage move will be. We just sold our primary house and are currently house shopping for the next one.

I was wondering, in the current economy, would it be best to get a fixed or variable rate mortgage? Also, for the term, I usually take 5 years. Besides uncertainty, are there any advantages in taking shorter terms?

What are the best avaible fixed and variable rates right now ?

Somme info:
House price : will be between 500 and 625K
Down payment: 150K
Location: Montreal, QC

Thank you
Newbie
Feb 16, 2019
6 posts
Hi,

I am looking for mortgage rate for our first home. Some information is as below:

- Income: My wife has already worked for 1 year and I'll start working in July (I already signed my contract). Family gross annual income will be 155k
- House price: 600 - 750k
- Downpayment: 20%
- Closing date: June 2019
- Location: GTA (Mississauga, Oakville, Vaughan)
- I have one study loan of 55k.

Thanks.
Deal Addict
User avatar
Sep 13, 2011
4792 posts
1706 upvotes
Toronto
jchung513 wrote:
Feb 16th, 2019 3:38 pm
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)
If just renewing with your current lender, you do not need to re-qualify. If switching lenders, you do need to re-qualify, however given the limited information I have so far, it should still qualify easily, even with the $35,000 on your LOC.
Things like property tax, car or loan payments, remaining amortization on your mortgage at renewal, and any balance carried month to month on your credit cards would also need to be considered. Future earning potential is not considered unfortunately.

Adding a HELOC, or additional credit will not have any signifiant negative effect on your score. There are a lot of myths out there about credit score. New credit and credit checks can affect your score, but as long as you have decent credit to begin with, then the effects of credit checks and additional credit are insignificant. Only if you have weak or borderline credit to you really need to be concerned about this.
Paul Meredith
Mortgage Broker, Author
CityCan Financial Corp (lic. 10532)
Deal Addict
User avatar
Sep 13, 2011
4792 posts
1706 upvotes
Toronto
thefeebster wrote:
Feb 16th, 2019 8:46 pm
Hi, i hope y'all can help me regarding Mortgage penalties. It was an area i've overlooked when prepping things. I've gone through my mortgage documents that i got from my broker at the time of purchase, but i can't find anything on the penalty calculation. How much do you think it'll end up costing?

I purchased a property that i just ended up hating so i knew i wanted to sell by the time my mortgage term ended. But maybe i made a mistake with the timing? There is about a 3 week difference in the closing date & mortgage term expiry date. During these awful two years, i inherited two other properties and moved into one of those. So i will not be porting the mortgage, straight termination.

Mortgage amount owing at maturity: 330k
Monthly Mortgage Payment: $1343, 2.29% fixed
Original purchase date (month and year): April 19/2017
Mortgage Maturity date: April 19/2019
Current lender: Scotiabank, conventional

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? No

Closing date: March 29/2019

Anyways, i hope i don't get penalized too harshly for 3 weeks difference. I don't even mind paying off the final month, but i doubt they'll let me.
So just to be clear, your closing date from the sale of this home is 3 weeks prior to the maturity date, correct? If that is the case, then Scotia will almost certainly just charge you the remaining interest on the term, plus the discharge fee. In this case, your penalty will likely be less than $500, plus discharge fee, which is around $300. So should be under $1,000 in total. You'll need to check with Scotia to confirm, but this will almost certainly be the case.

Big banks have the harshest penalties of all mortgage lenders when it comes to breaking fixed rate mortgages, however when you have less than three months remaining, it's almost always just the remaining interest that is charged, regardless of lender.

Hope this answers your question. Let me know if anything needs clarification and i'd be happy to do so. :)
Paul Meredith
Mortgage Broker, Author
CityCan Financial Corp (lic. 10532)
Deal Addict
User avatar
Sep 13, 2011
4792 posts
1706 upvotes
Toronto
TechDogg wrote:
Feb 17th, 2019 9:50 am
Hi, need some help in figuring out what my next mortgage move will be. We just sold our primary house and are currently house shopping for the next one.

I was wondering, in the current economy, would it be best to get a fixed or variable rate mortgage? Also, for the term, I usually take 5 years. Besides uncertainty, are there any advantages in taking shorter terms?

What are the best avaible fixed and variable rates right now ?

Somme info:
House price : will be between 500 and 625K
Down payment: 150K
Location: Montreal, QC

Thank you
Rates can vary based on the your down payment amount (or equity in the property if switching lenders at end of a term). In your case, if you were to purchase something at the low end of the spectrum, $500,000, your $150,000 down payment would be 30%. This will be enough to get you today's lowest 5 year variable of prime -1.15% (2.80%). However, if your down payment was less than 30%, the lowest 5 year variable rate would change to prime -0.95% (3.00%).
With 5 year fixed rate mortgages, your lowest rate would be 3.44% in either case. You would need to have 35% down payment to hit today's lowest 5 year fixed rate of 3.29%.

5 year fixed rates are not always the best choice for people, and in some cases it makes sense to go with a shorter term. However, in today's mortgage world, 5 year terms will usually get you lower rates than shorter term alternatives (with few exceptions). A few years ago, shorter terms were almost always at lower rates, however things have now changed.

Should you go fixed or variable?
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 year by the Bank of Canada. We have now seen five increases to prime rate since July, 2017. There were predictions back in the fall 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 will likely be holding off on these planned rate increases. Even if they were to move forward with the increases, we could then expect to see prime rate 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.

All that being said, variable is definitely a good choice these days, but may not be the best choice for everyone. There is no universally correct answer. There never is. 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.

The question isn't necessarily which is generally better between fixed and variable. 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.

One 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.

Here is a link to a calculator you can use to compare fixed with variable to get a better feel for how potential rate increases (or decreases) will affect you. http://www.mortgagecalculatortoolkit.co ... able-rate/

Hope you find this helpful. :)
Paul Meredith
Mortgage Broker, Author
CityCan Financial Corp (lic. 10532)
Deal Addict
User avatar
Sep 13, 2011
4792 posts
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KEVO19 wrote:
Feb 17th, 2019 10:48 am
Hi,

I am looking for mortgage rate for our first home. Some information is as below:

- Income: My wife has already worked for 1 year and I'll start working in July (I already signed my contract). Family gross annual income will be 155k
- House price: 600 - 750k
- Downpayment: 20%
- Closing date: June 2019
- Location: GTA (Mississauga, Oakville, Vaughan)
- I have one study loan of 55k.

Thanks.
What is your wife's income alone? Your income can not be considered since your start date falls after your closing date.
What is the minimum payment you need to make on the student loan?
Do you have any other bank loans or car payments? If so, what are the payments?
Do either of you carry a balance on your credit cards month-to-month? If so, what is the balance carried?
Are you starting this job fresh out of school? Or do you have prior work history doing the same job or working in the same industry? Will there be probation period with the new job?
Is the new job full time permanent? Or is there an end date to the contract?

Since you gave a range for purchase price, i'm assuming that you do not yet have an accepted offer on a property?
Are you purchasing a new build or a resale home?
Paul Meredith
Mortgage Broker, Author
CityCan Financial Corp (lic. 10532)
Deal Addict
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Jan 31, 2018
1236 posts
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nasdaqnyse wrote:
Feb 15th, 2019 1:40 pm
Looking for a 5 year fixed mortgage for a condo purchase in Calgary.
Purchase Price: 400,000
Downpayment: 20%: 80,000
Please PM with rate and lender.
5 yr fixed 3.49%

5 yr variable 3% or prime -.95%

Both options have 20/20 prepayment options

Phil
Phil Cragg
Mortgage Broker
Mortgage Outlet Inc Broker License #12628
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Jan 31, 2018
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WL1980 wrote:
Feb 16th, 2019 2:11 am
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.
Unfortunately rental rates are not as competitive as the owner occupied properties

See below

3.45% 5 yr variable

3.69% 5 yr fixed

Phil
Phil Cragg
Mortgage Broker
Mortgage Outlet Inc Broker License #12628
Newbie
Sep 14, 2010
21 posts
1 upvote
Mortgage amount owing at maturity (or current mortgage amount if unknown) 395,000
Approximate market value: 600,000
Original purchase date: June 2014
Current lender: First National
Is this your primary residence or a rental property?: Primary
Location: Guelph, ON
Maturity date: June 2019
Credit Score: 804

FN is offering renewal rates of 5 year fixed for 3.79 or 5 year variable prime -0.45 - 20 year amortization
any better rates out there?
Newbie
Feb 16, 2019
1 posts
Looking to get a 5 year fixed mortgage for $400,000 with 20% down payment for a $500,000 house in Montreal. Current best rate showing is from True North at 3.29%. I have yet to approach them as I want to see what rates the RFD broker community are able to offer.

I've been employed full time in the same position for the past 6 years, making $82,000/year. I also have my own small business, incorporated in April, 2017 which is profitable but I have yet to draw a salary. Strong credit score with $0 owing on loans.

Brokers, please PM me with any additional questions and your best competitive rates (keeping True North's in mind). Thanks in advance.
Deal Addict
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Jan 31, 2018
1236 posts
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marder wrote:
Feb 17th, 2019 4:22 pm
Mortgage amount owing at maturity (or current mortgage amount if unknown) 395,000
Approximate market value: 600,000
Original purchase date: June 2014
Current lender: First National
Is this your primary residence or a rental property?: Primary
Location: Guelph, ON
Maturity date: June 2019
Credit Score: 804

FN is offering renewal rates of 5 year fixed for 3.79 or 5 year variable prime -0.45 - 20 year amortization
any better rates out there?
You definitely have better rate options see below

note if your property came in slightly higher you would be eligible for even better rates as you would be below the 65% loan to value threshold (only on the fixed side)

5 yr fixed 3.39% or 3.34% if your property came in slightly higher

5 yr variable 2.80% or prime -1.15% 20/20 prepayment options - no change if property came in higher

As you can see great savings vs your current lenders offer

Phil
Phil Cragg
Mortgage Broker
Mortgage Outlet Inc Broker License #12628
Deal Addict
Dec 28, 2007
4176 posts
2582 upvotes
rateconnect wrote:
Feb 17th, 2019 4:09 pm
Unfortunately rental rates are not as competitive as the owner occupied properties

See below

3.45% 5 yr variable

3.69% 5 yr fixed

Phil
Which lender is this. TD quoted me 3.65 variable 5 years.
Newbie
Feb 22, 2017
2 posts
1 upvote
The question isn't necessarily which is generally better between fixed and variable. 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.
One 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.
Wow, amazing answer! It really all depends on my tolerance to risk, and you are absolutely right on. And the strategy you suggested is a very good way to offset part of that risk, up until the variable rate matches the fixed. If they cross and the variable becomes higher, then I'm in the "red", so to speak. I have to see how well I can live with this.

Overall, I came out with great info. Didn't how the size of the down payment influenced which rates were available to me.

Thank you Paul!

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