Real Estate

The Official Mortgage Rates Thread

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May 1, 2017
1064 posts
227 upvotes
morden wrote: Ok since posting the above I've been poring over the thread, learning about collateral vs non-collateral mortgages, mortgage portability, IRDs, etc. I've got 60 days until renewal date and I still have some questions. I've had some dealings with a local broker and been underwhelmed with him, so thought I would ask the pros here (who've been super helpful already).

A recap:

CIBC Mortgage (current 2.99 5yr fixed)
Renewal in Montreal, QC
Maturity date May 30 2019
Maturity amount $148k
House value est. $498k (Purview)
CIBC HELOC 30k (separate charge confirmed)

We have a young family but kids will reach high school in the next 3 years and our house is small. We would either like to move to a larger home or add an extension to this one (but not anywhere near ready to make this decision before renewal date).

CIBC offered us a Home Power Plan (collateral mortgage with HELOC 3.47%) and the broker got us in touch with TD for a Flexline (3.24%). These are both collateral mortgages, no? Having read about collateral mortgages it seems its harder to transfer/break when renewing or buying a new home. We would need to pay to discharge or (or have the new lender cover it).

Question: If we do end up deciding to add extension (100k+), is having the HELOC the best option? Would a second mortgage be cheaper/make more sense? Is it worth it to avoid the collateral mortgage?

Lastly, maybe we should look at a shorter term fixed or variable?

Thanks in advance for any insights.
Hello,

Anything with a built-in home equity line of credit will be a collateral charge mortgage. The Home Power Plan and the TD Flexline are both registered collaterally. Collateral charge mortgages get a bad rap around here, but they can be useful products in many, many cases. They are somewhat more costly to transfer at the end of your term but most lenders already offer collateral charge transfer programs at their best rates, and in many cases the fees can be covered by the new lender. The fee is typically between $580 - $800 for a collateral charge transfer, depending on the province. If you get $800 in perceived utility from having a combination mortgage and LOC product, then not much is lost. I have to assume that in 5 years time, all lenders will entertain collateral charge transfers as it's already very common.

As for the addition/renovation. In most cases the line of credit is the optimal route when the outlay is going to be in stages. This is because you will only pay interest on the funds you've used, whereas by taking the funds in cash you pay interest on those funds immediately. Further, once your renovation is complete, you can lock that heloc component into a fixed or variable amortized mortgage component to reduce the interest cost.

Best,

Connor
_________________________________
Connor Green
Mortgage Agent
Concierge Mortgage Group
#12179
Newbie
Feb 10, 2014
33 posts
72 upvotes
MONTR
would I get better rates with a 15% cashdown instead?
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May 1, 2017
1064 posts
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akhohd wrote: would I get better rates with a 15% cashdown instead?
Hello,

Yes, you would get better rates, but there's a major misconception here. With less than 20% down, borrowers have to may a mortgage default insurance premium, which is added to the mortgage balance, and thus interest is paid on it as well. This insurance premium is for a policy that protects the lender against borrower default and is mandatory for all mortgage with less than 20% down payment. With a down payment of 15%, the insurance premium is 2.80% pf the mortgage balance. You get a better rate, but the cost of borrowing is higher because of the premium and interest that you'll pay on it. It's better to take the higher rate at 20% and negate the insurance premium.

Best,

Connor
_________________________________
Connor Green
Mortgage Agent
Concierge Mortgage Group
#12179
Member
May 13, 2009
213 posts
372 upvotes
Ottawa, ON
Hi Everyone,

I have a mortgage on a rental property that I will probably sell in the next year and I'm looking for a 1 year mortgage.

Current lender: Scotiabank
Current Interest rate: 3.10%
Principal balance:$121,484.12
Type: Residential, Fixed Rate
Remaining amortization: 22 Year(s) 5 Month(s)
Maturity date: April 12, 2019

I talked to Scotia and they said they can offer 3.49%. I'm thinking of taking it as there isn't a lot of products for 1 year.
Deal Addict
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May 1, 2017
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juniorkid wrote: Hi Everyone,

I have a mortgage on a rental property that I will probably sell in the next year and I'm looking for a 1 year mortgage.

Current lender: Scotiabank
Current Interest rate: 3.10%
Principal balance:$121,484.12
Type: Residential, Fixed Rate
Remaining amortization: 22 Year(s) 5 Month(s)
Maturity date: April 12, 2019

I talked to Scotia and they said they can offer 3.49%. I'm thinking of taking it as there isn't a lot of products for 1 year.
Hello,

The best rate for 1 year term is close to 3.29%. For just a very short term, it may not be best to transfer. You can however consider taking a longer term product that you can port over to the new property (if you are planning on buying another when you sell) penalty free.

Connor
_________________________________
Connor Green
Mortgage Agent
Concierge Mortgage Group
#12179
Member
May 13, 2009
213 posts
372 upvotes
Ottawa, ON
GreenMortgages wrote: Hello,

The best rate for 1 year term is close to 3.29%. For just a very short term, it may not be best to transfer. You can however consider taking a longer term product that you can port over to the new property (if you are planning on buying another when you sell) penalty free.

Connor
Thanks for the quick reply Connor.
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May 1, 2017
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juniorkid wrote: Thanks for the quick reply Connor.
No problem!
_________________________________
Connor Green
Mortgage Agent
Concierge Mortgage Group
#12179
Deal Addict
User avatar
May 1, 2017
1064 posts
227 upvotes
laineylains70932 wrote: End of May. I believe may 29
Hello,

Given the information you've provided, you should have rates around 3.04% available to you for a 5 year fixed, and p-1.15% for a 5 year variable.

Best,

Connor
_________________________________
Connor Green
Mortgage Agent
Concierge Mortgage Group
#12179
Newbie
Mar 25, 2019
1 posts
Hello.

I contacted Tangerine, and they offer:

3 year fixed - 3.09%
5 year fixed - 3.19%

What do you think about rates and Tangerine?


What's the best rate for my situation:

Purchase price - $419k
20% down
30 year amortization
Principal residence in Richmond Hill, ON
Looking for 3,4,5 years.

Thanks
Newbie
Apr 4, 2009
5 posts
t-dot
Hello,

Looking possible mortgage approval amount. What is Max on 25 Y - 5 Year fixed or variable.

Income $95K
Down payment : $140K

What are the best options. I see a 5-y fixed with HSBC for 2.89%

Thanks
Deal Addict
User avatar
May 1, 2017
1064 posts
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krapy12 wrote: Hello,

Looking possible mortgage approval amount. What is Max on 25 Y - 5 Year fixed or variable.

Income $95K
Down payment : $140K

What are the best options. I see a 5-y fixed with HSBC for 2.89%

Thanks
Hi there,

It's nearly impossible to be accurate with a maximum borrowing amount without a full application that takes into account income type, employment type, credit standing and outstanding debts, prospective property type (and the costs associated like condo fees and property taxes), etc. That said, a multiplier of 4-5x your gross income can be used as a rule of thumb, but in no means should be used as a pre-approved amount. So, you can likely borrow somewhere between $380,000 and $475,000 in mortgage funds. Combined with a down payment of $140,000, you would be looking at a maximum purchase price of $520,000 to $615,000. Again, these are rough figures - you should get yourself pre-approved to find out your borrowing capacity more concretely.

Rates are dependant on the individual circumstances, and take into account plenty of factors like loan-to-value, income qualifying, amortization required, credit score, geographic location, etc. so quoting a rate isn't really practical at this time.

Best,

Connor
_________________________________
Connor Green
Mortgage Agent
Concierge Mortgage Group
#12179
Newbie
Apr 4, 2009
5 posts
t-dot
GreenMortgages wrote: Hi there,

It's nearly impossible to be accurate with a maximum borrowing amount without a full application that takes into account income type, employment type, credit standing and outstanding debts, prospective property type (and the costs associated like condo fees and property taxes), etc. That said, a multiplier of 4-5x your gross income can be used as a rule of thumb, but in no means should be used as a pre-approved amount. So, you can likely borrow somewhere between $380,000 and $475,000 in mortgage funds. Combined with a down payment of $140,000, you would be looking at a maximum purchase price of $520,000 to $615,000. Again, these are rough figures - you should get yourself pre-approved to find out your borrowing capacity more concretely.

Rates are dependant on the individual circumstances, and take into account plenty of factors like loan-to-value, income qualifying, amortization required, credit score, geographic location, etc. so quoting a rate isn't really practical at this time.

Best,

Connor
Thanks for the reply. Appreciate that.

Looking outside the city of Toronto. Milton.. No debt, Good credit. My wife works part-time and mostly stays home with our one child. She makes around 10K. But around 50-60 if FT.
I make 90 but could be more with higher bonus as i work in investment business.


Thank you
Newbie
Apr 4, 2009
5 posts
t-dot
GreenMortgages wrote: Hi there,

It's nearly impossible to be accurate with a maximum borrowing amount without a full application that takes into account income type, employment type, credit standing and outstanding debts, prospective property type (and the costs associated like condo fees and property taxes), etc. That said, a multiplier of 4-5x your gross income can be used as a rule of thumb, but in no means should be used as a pre-approved amount. So, you can likely borrow somewhere between $380,000 and $475,000 in mortgage funds. Combined with a down payment of $140,000, you would be looking at a maximum purchase price of $520,000 to $615,000. Again, these are rough figures - you should get yourself pre-approved to find out your borrowing capacity more concretely.

Rates are dependant on the individual circumstances, and take into account plenty of factors like loan-to-value, income qualifying, amortization required, credit score, geographic location, etc. so quoting a rate isn't really practical at this time.

Best,

Connor
Thanks for the reply. Appreciate that.

Looking outside the city of Toronto. Milton.. No debt, Good credit. My wife works part-time and mostly stays home with our one child. She makes around 10K. But around 50-60 if FT.
I make 90 but could be more with higher bonus as i work in investment business.


Thank you
Newbie
Feb 10, 2014
33 posts
72 upvotes
MONTR
GreenMortgages wrote: Hello,

Yes, you would get better rates, but there's a major misconception here. With less than 20% down, borrowers have to may a mortgage default insurance premium, which is added to the mortgage balance, and thus interest is paid on it as well. This insurance premium is for a policy that protects the lender against borrower default and is mandatory for all mortgage with less than 20% down payment. With a down payment of 15%, the insurance premium is 2.80% pf the mortgage balance. You get a better rate, but the cost of borrowing is higher because of the premium and interest that you'll pay on it. It's better to take the higher rate at 20% and negate the insurance premium.

Best,

Connor
But placing that 5% at, lets say, 3% for 25 years will pay more than the insurance premium
what am i missing?
:)
Thanks!

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