Real Estate

The Official Mortgage Rates Thread

Deal Fanatic
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Feb 2, 2014
6439 posts
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Toronto
toxicshev wrote:
Feb 19th, 2019 2:59 pm
TD---offered an online early-renewal rate 3.59/5 yrs fixed, then called and asked for 3.39/5 yrs fixed. Two days later request approved. Worth a shot.
You could go as low as 3.29% 5-year fixed. To get an exact quote:

For a mortgage transfer/renewal:

-How much is the mortgage owing?
-Roughly, what is the current market value of the property?
-Which city is the property located in?
-Is the property owner-occupied or a rental?
-Who is your current lender?
-Do you have a HELOC tied to the mortgage?
-Is the mortgage CMHC insured?
-When did you buy the property?
-When is your renewal date?
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
Oct 14, 2018
6 posts
I have an accepted deal and am hoping someone can help me understand this:
Existing mortgage:
Property on which mortgage is taken: Condo (Markham)
Product: 5-yr Fixed
Rate: 2.45%
How many years remain: nearly 2yrs
How much more mortgage remain: nearly $227,000

New Mortgage:
Property on which mortgage is taken: Semi-Detached (Markham)
Price of the property: $775,000
Mortgage sought: nearly $475,000 ($300K from equity of condo selling + savings)

I would like to port this mortgage to my new property.
How does this work?
What would be the estimated charges on it if I pursue this path?
What would be the estimated charges if I plan to close this and take a fresh mortgage for the entire $475K (pros Vs. cons)?
In case I don't want to take the remaining mortgage with the same lender, is that possible? Would that then be considered a second mortgage?

Any additional info in this regard is appreciated. Any personal experience with such cases would be very helpful too.
Thanks!
Newbie
Feb 17, 2019
3 posts
CdnRealEstateGuy wrote:
Feb 19th, 2019 2:42 pm
I can get it done on exception. Once you have an accepted offer on a property, you can give me a shout. Make sure you have a financing condition in your offer.
Thank you very much! What do you mean by a financing condition in my offer?

Also, if you or someone could help us about the other questions we have (in my first message) that would be awesome, as we're not super confortable with all of that yet :/
Member
Nov 24, 2015
257 posts
147 upvotes
Toronto, ON
PaulMeredith wrote:
Feb 19th, 2019 12:02 pm
There are two debt service ratios involved with qualification. The Gross Debt Service Ratio (GDSR) and the Total Debt Service Ratio (GDSR). These are more commonly referred to as the GDS and TDS.

GDS
The GDS is your total mortgage payment including principal and interest, in addition to your property tax and heating costs (commonly written as PITH) divided by your income.

The formula looks like this:

PITH (principal, interest, heat, taxes) / Income

TDS
The TDS is your total mortgage payment, taxes and heat (PITH), plus the monthly payment on all your other debt, divided by your income. For traditional bank loans, including car loans / leases, the actual monthly payment is used for the debt service calculation. For credit card or line of credit balances (unsecured, revolving debt), 3% of the balance is used, regardless of the actual amount owing, even if there are no payments required for a specified period.
Child care payments would be considered if they are part of a divorce agreement, however that is the only situation where they are used. Insurance is never considered for debt service ratios.

The formula for the TDS looks like this:

PITH + debt payments / Income

Both the GDS and TDS can be calculated on a monthly basis or on an annual basis. Either way, the results are the same.
While heating is often an unknown and unprovable variable, most lenders will use $100 or $125 when calculating debt service ratios. Some lenders will allow more or less than this, depending on the actual square footage of the property. Heat is the only utility that gets factored into debt service. Water, hydro, etc. are irrelevant and are never considered.
In cases where there is a condo or maintenance fee, the fee gets calculated into the debt service ratio at 50% of the actual amount. In other words, if the condo fee were $400, only $200 would be used in these calculations. If the maintenance fee includes heat, as it sometimes does, then heating costs can be omitted.
The maximum GDS is 39% and the maximum TDS is 44%.

The qualifying rate right now (stress test) is the higher of the benchmark rate, which is currently 5.34%, or 2% above the contract rate (the rate your payments are based on). So if your 5 year fixed rate is 3.29% (available on insured mortgages or those with down payments of 35% or greater), then the qualifying rate used would be 5.34%. If your rate is 3.44%, which is the lowest rate with 20% down payment, then the qualifying rate would be 5.44% (2% higher).

That's about as comprehensive of a guide as you will get. :)
Very comprehensive indeed.

Thanks.
Newbie
Feb 16, 2019
5 posts
PaulMeredith wrote:
Feb 17th, 2019 12:38 pm
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?
Hi Paul,

Thanks for replying. The information is as below:
- My wife's income: ~70k
- Minimum payment on student loan: $160/month
- No other bank loan or car payment
- We pay off our credit balance every month, no balance carried over
- I graduated from the MBA program with 4 years of working experience in other industries. Probation period is 3 months. This is a permanent role.
I have not made any offer and we are not particular about new or resale home.
Deal Fanatic
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Feb 2, 2014
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Toronto
danishbanjo wrote:
Feb 19th, 2019 5:32 pm
Thank you very much! What do you mean by a financing condition in my offer?

Also, if you or someone could help us about the other questions we have (in my first message) that would be awesome, as we're not super confortable with all of that yet :/
In Quebec, you will have to provide the seller with a firm mortgage approval before the sale is firm...this is mandatory unlike other provinces in Canada. This protects you and your deposit in case you can't get a mortgage. Your real estate agent can provide you more information on this.
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
Dec 11, 2009
13 posts
Kitchener
Hi there,

I'm hoping to get some help with renewing my mortgage. The details:

Current lender/rate: TD @ 2.34%, 3yr fixed
Renewal: March 1, 2019
Owner occupied, 32yrs old, $120,000 salary, credit score 750+ (I don't remember specifically what it is)
Build date:/first mortgage: Feb 2016 @ approx $335,000
Detached home with $159,100 left on mortgage
Currently paying $545.93 (principle+interest) weekly (trying to kill it off quickly)
Market value: $500,000 (estimated)
No CMCH
Location: Kitchener, ON
Debt: car loan @ $212 every 2 weeks, 4yrs left; no other loans

The rates I received from TD are:
3yr fixed: 3.62%
5yr fixed: 3.68%
5yr variable: 3.46%

Questions
What is the best rate I can get?
Deal Fanatic
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Dec 21, 2005
5211 posts
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Markham
Syrups wrote:
Feb 19th, 2019 9:09 pm
Hi there,

I'm hoping to get some help with renewing my mortgage. The details:

Current lender/rate: TD @ 2.34%, 3yr fixed
Renewal: March 1, 2019
Owner occupied, 32yrs old, $120,000 salary, credit score 750+ (I don't remember specifically what it is)
Build date:/first mortgage: Feb 2016 @ approx $335,000
Detached home with $159,100 left on mortgage
Currently paying $545.93 (principle+interest) weekly (trying to kill it off quickly)
Market value: $500,000 (estimated)
No CMCH
Location: Kitchener, ON
Debt: car loan @ $212 every 2 weeks, 4yrs left; no other loans

The rates I received from TD are:
3yr fixed: 3.62%
5yr fixed: 3.68%
5yr variable: 3.46%

Questions
What is the best rate I can get?
Getting quoted same 5 yr rates for TD in London
Looking to “fix” rates on a HELOC with about $130k outstanding...could look to borrow $200k and invest the difference
:idea: :) :lol: :razz: :D
Deal Fanatic
User avatar
Feb 2, 2014
6439 posts
1524 upvotes
Toronto
Syrups wrote:
Feb 19th, 2019 9:09 pm
Hi there,

I'm hoping to get some help with renewing my mortgage. The details:

Current lender/rate: TD @ 2.34%, 3yr fixed
Renewal: March 1, 2019
Owner occupied, 32yrs old, $120,000 salary, credit score 750+ (I don't remember specifically what it is)
Build date:/first mortgage: Feb 2016 @ approx $335,000
Detached home with $159,100 left on mortgage
Currently paying $545.93 (principle+interest) weekly (trying to kill it off quickly)
Market value: $500,000 (estimated)
No CMCH
Location: Kitchener, ON
Debt: car loan @ $212 every 2 weeks, 4yrs left; no other loans

The rates I received from TD are:
3yr fixed: 3.62%
5yr fixed: 3.68%
5yr variable: 3.46%

Questions
What is the best rate I can get?
3.29% 5-year fixed and 2.80% (Prime -1.15%) 5-year variable are the best rates. You will have to pay a $800 legal fee due to the collateral charge (all TD mortgages are collateral charges).
Kevin Somnauth, CFA
Mortgage Broker - Mortgage Architects (#10287) and Real Estate Salesperson - Century 21 Innovative
President's Club Award Winner At The Mortgage Architects
Deal Fanatic
User avatar
Feb 2, 2014
6439 posts
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Toronto
charliebrown wrote:
Feb 19th, 2019 9:22 pm
Getting quoted same 5 yr rates for TD in London
Looking to “fix” rates on a HELOC with about $130k outstanding...could look to borrow $200k and invest the difference
See above
Kevin Somnauth, CFA
Mortgage Broker - Mortgage Architects (#10287) and Real Estate Salesperson - Century 21 Innovative
President's Club Award Winner At The Mortgage Architects
Jr. Member
Apr 13, 2013
100 posts
8 upvotes
Woodbridge
Some question at the time of renewal :

1. If you want to add 20,000$ for Car & planning to put that amount in your mortgage, is it consider as Refinancing?

2. If you want to add HELOC with your Mortgage or Refinancing your Mortgage at the time of renewal, what is the reason that you won’t get better rate?
Deal Addict
User avatar
Jan 31, 2018
1021 posts
158 upvotes
Syrups wrote:
Feb 19th, 2019 9:09 pm
Hi there,

I'm hoping to get some help with renewing my mortgage. The details:

Current lender/rate: TD @ 2.34%, 3yr fixed
Renewal: March 1, 2019
Owner occupied, 32yrs old, $120,000 salary, credit score 750+ (I don't remember specifically what it is)
Build date:/first mortgage: Feb 2016 @ approx $335,000
Detached home with $159,100 left on mortgage
Currently paying $545.93 (principle+interest) weekly (trying to kill it off quickly)
Market value: $500,000 (estimated)
No CMCH
Location: Kitchener, ON
Debt: car loan @ $212 every 2 weeks, 4yrs left; no other loans

The rates I received from TD are:
3yr fixed: 3.62%
5yr fixed: 3.68%
5yr variable: 3.46%

Questions
What is the best rate I can get?
Best rates available below

2.80% 5 yr variable & 3.29% 5 yr fixed

You will have legal of approx $800 due to collateral charge with TD

Reach out to any of the brokers on the forum

Phil
Phil Cragg
Mortgage Broker
Mortgage Outlet Inc Broker License #12628
Newbie
Feb 19, 2019
1 posts
Mississauga, ON
Hello all,

I was having trouble with app, so my apologies if this post shows up multiple times.

First time poster, so hopefully format is alright.

Purchase price: 580K
Possession: July
New construction
Location: Quebec
Down: 20%
Combined income:160K
Credit: Very good
First time home buyer

Wanting ability to put lump sum amounts
Looking at Variable and 5 year fixed (Open to feedback/opinions)

Thank you for your help!
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Sep 13, 2011
4585 posts
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Toronto
Pentacool wrote:
Feb 19th, 2019 10:04 pm
Some question at the time of renewal :

1. If you want to add 20,000$ for Car & planning to put that amount in your mortgage, is it consider as Refinancing?

2. If you want to add HELOC with your Mortgage or Refinancing your Mortgage at the time of renewal, what is the reason that you won’t get better rate?
Yes, increasing your mortgage amount at time of renewal (or mid-term) would be considered refinancing. The reason why rates are a bit higher for refinancing has to do with the cost of funds to that lender. When you refinance, that mortgage is no longer insurable by that lender, which then drives up their cost of funds. This in turn results in a higher rate. The lowest rates are always going to be with insurable mortgages. Let me explain further.

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). The lenders ability to do this reduces the cost of funds to that lender, 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. 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 fixed is 3.44%. With 35%, it drops to 3.29%.
If you had LESS than 20% and therefore CMHC insured, then the rate would be 3.29%. Sometimes, the insured mortgages are even lower than those with 25% down payment / equity, which is the case with variable right now.

The lowest 5 year variable with 20% downpayment / equity would be prime -0.95% (3.00%). However, with a 35% or greater down payment, rate would drop to prime -1.15% (2.80%). If the down payment is less than 20%, therefore insured, then the variable would be prime -1.20% (2.75%).

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)
Newbie
Feb 17, 2019
3 posts
Thanks for all replies.

To summary based on my case,
1. 3.66% for fixed 5 year seems high.
2. I can get better option with some brokers here. --> In that case, I expect that I need to change the bank from scotiabank. Then is there any penalty changing the bank?
3. The rate will hold 90 days.

So I think that I can wait until May and see the mortgage rate situation. Hopefully, the rate will go down in 3 months. Is this reasonable approach with current situation?

Thank you very much.


---------------------------------
Hi.

I'm in my first mortgage renewal period now. (My actual renewal date is Aug/2019).
I started my mortgage since Aug/2017 and I did fixed 2 years (2.46%).

Scotiabank (my mortgage bank) contacted me and gave me some options for the renewal.
1. Fixed 2 year closed: 3.48% (After 2/28, it will be 3.56%)
2. Fixed 5 year closed: 3.66% (After 2/28, it will be 3.74%)
3. Variable 5 year: 3.46%

Is this good deal? So I need to re-new it now based on their option or I can just wait until my actual renewal date comes because I might have lower rate due to expectation of not increasing of the mortage rate like last year. Or I need to contact other banks like RBC. (I'm using RBC mainly.)

I'm thinking 2 year fixed now because I may move to another place. But not sure.

This is some information.
1. Mortgage amount (now): 310K
2. Amortization period: 23 yr 7 months
3. Down-payment: 250K (~43%)
4. Location: Ottawa

Any information would be appreciated!
Thank you very much and happy family day.
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