Real Estate

The Official Mortgage Rates Thread

Deal Addict
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Sep 13, 2011
4968 posts
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Toronto
pata3004 wrote:
Apr 11th, 2019 1:48 pm
Hello Experts,

Looking for some idea on 5 year fixed rates for my situation. First time buyer, bought a house in GTA. Details are all follows:

Purchase price - $610,000
Down payment amount (or percentage) - 5%
Primary residence or rental property - Primary
Province - Ontario
Closing date - May 20th
Lowest 5 year fixed for your situation would be 2.84%, or 5 year variable at prime -1.20% (2.75%)
Paul Meredith
Mortgage Broker, Author
CityCan Financial Corp (lic. 10532)
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Sep 13, 2011
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derdev wrote:
Apr 11th, 2019 1:18 pm
This is one of my favourite threads on RFD. Thanks to everyone involved!

I have a question about lenders other than the big five e.g. MCAP, ManuLife/ManuVie, etc:
- I know these alternative lenders provide better rates and better payment privileges (e.g. 20/20) than the big banks
- Are there any hidden fees in their contracts, say that come up at renewal time?

This is a question for both brokers and customers that have renewed their mortgage while being a client of such lenders. Any unexpected fees/issues?
This is a very common question. Andre already give an excellent response, but I wanted to add a bit more. For the most part, mortgages with most non-bank lenders have no hidden costs whatsoever. They would never be able to get away with it. If that were true, it would be all over this board. In my 8 years on this board, I don't recall a single post where someone said they were charged a hidden fee. That's because there aren't any. Many of us brokers have build solid reputations on providing the right advice for our clients, which we have done by letting them know all the facts up front. If there is anything unique or unusual about a particular mortgage product or lender, we'll let them know up front.

While there are no hidden costs, or addtional costs of any kind when working with a non-bank lender, there are always restrictions that certain mortgages may carry. This applies to both bank, as well as non-bank lenders. I posted a list of the most common mortgage restrictions, as well as which lenders they are with. Here's the list again:

- Lack of bridge Financing (Industrial Alliance).

- Fully closed mortgages where you can only break the mortgage early if you can sell your home (some products with MCAP, CMLS and BMO).

- Higher than normal penalties to break the mortgage early (Industrial Alliance, and some products with Merix and RMG. Plus, all of the big banks on fixed rate mortgages (penalties to break a mortgage with the big banks can be as much as 500% higher than most non-bank lenders).

- Limited prepayment privileges (Industrial Alliance, RBC, and some products with BMO)

- Higher than industry prime rate (TD and Investors Group).

- Collateral mortgages (TD, Tangerine, National Bank, and HSBC. Plus, a mortgage from any lender that contains a HELOC or second component of any kind).

- Variable rate mortgage that is compounded monthly as opposed to semi-annually (Merix, CMLS, TD, RBC, BMO, CIBC, National Bank).


The above covers just about everything. Aside from that, most mortgages are fairly similar. Keep in mind this is a heavily regulated industry, as Andre had mentioned. There are many myths about non-bank lenders (most likely created by the big banks) such as extra fees, miss a payment and the lender will take your house, brokers charge fees, or if the smaller lender goes out of business then you will be facing a big headache and have to pay all sorts of fees to get out of it. Nothing of course could be further from the truth. If the 'small' lender happens to go out of business, their mortgage portfolio would just get taken over by another lender. All the same terms and conditions would remain in place and the only difference to you is that the logo on your mortgage statement changes.

Also, some of these ‘small' lenders are also quite large. Industrial Alliance is a publicly traded company that has been around for over 130 years and has over 5,000 employees across Canada. They have over $150 billion in assets under their management. MCAP has over $70 Billion in assets under their management. First National has a larger mortgage portfolio than National Bank and is a little less than BMO with $100 Billion.

I mentioned above that big banks have much harsher penalty formulas if you found yourself in a situation where you needed to break your mortgage early (fixed rates only). Here are some articles:

http://www.theglobeandmail.com/globe-in ... e15774375/
http://www.cbc.ca/news/customer-fee-to- ... -1.1055127
http://canadamortgagenews.ca/2011/01/04 ... penalties/
http://www.cbc.ca/news/canada/edmonton/ ... -1.2790108
http://www.canadianmortgagetrends.com/c ... lties.html

That being said... spending thousands of dollars more to go with a major bank doesn't make a lot of sense financially. The only real benefit to you is that you can have all your accounts with the same institution and can view them all on the screen together. Not much more.... other than recognizing the logo on your mortgage statement.
Paul Meredith
Mortgage Broker, Author
CityCan Financial Corp (lic. 10532)
Newbie
Apr 9, 2019
4 posts
Thank you Paul for the info! I will reach to the Forum once again in August.
Deal Addict
Oct 12, 2006
1651 posts
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Alberta
Coming up on renewal.

Currently:
Purchase: $470,000
Mortgage Balance: $280,566.29
Maturity Date: December-22-19
Term: 5 years
Remaining Term: 9 months
Remaining Amortization: 13 years, 7 months (Bought Dec 2014 with 30 yr amortization, but did a bunch of pre-payment and payment increases).
Interest Rate: 3.25% (Prime - 0.7)
Variable or Fixed: Variable

What's out there for 5 year fixed vs variable.
Member
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Mar 2, 2009
468 posts
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Thanks Andre and Paul for your detailed answers!
Deal Addict
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Dec 1, 2015
1966 posts
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Etobicoke, ON
It is too early to lock a rate now until Dec. Often the best rates are available for up to 90 days, sometimes 120 days.
Chingyul wrote:
Apr 11th, 2019 4:46 pm
Coming up on renewal.

Currently:
Purchase: $470,000
Mortgage Balance: $280,566.29
Maturity Date: December-22-19
Term: 5 years
Remaining Term: 9 months
Remaining Amortization: 13 years, 7 months (Bought Dec 2014 with 30 yr amortization, but did a bunch of pre-payment and payment increases).
Interest Rate: 3.25% (Prime - 0.7)
Variable or Fixed: Variable

What's out there for 5 year fixed vs variable.
Andre Oliveira - Mortgage Agent at Valuemortgage
2018 Top 20 National - Mortgage Intelligence
FSCO # 10428
Newbie
Feb 8, 2008
10 posts
Explode wrote:
Apr 11th, 2019 1:02 pm
I am looking for a mortgage for the new home. The bank referred to a new mortgage as a refinance. I am looking to extend the amortization out as I am increasing the mortgage amount and would like to keep the monthly payments down.
Yeah, I was told this morning by Scotiabank rep that when I moved my mortgage to them in 2014, it's not transfer but refinance. I told them I never increased my amortization or my loan, how come it's refinance. He said since it's new mortgage application so it's refinance. Now I'm not sure what will happen to the CMHC insurance I paid in 2009.
Newbie
Apr 10, 2019
2 posts
stasik wrote:
Nov 17th, 2018 12:19 pm
Has anyone heard of RFA mortgage? Any issues etc?

Also, for reference for other folks, here are the best rates i've been able to get on 700k property with 20-40% down as of last Fri. This is a mix of rates obtained from Dash, True North and Canwise.
Variable (no bona fide sales clause)
20% down 2.95%
35% down 2.75%
Fixed (no bona fide sales clause)
20% down 3.64%
25-30% down 3.59%
35% down 3.44%

with $500 cash back.

(If anyone knows any better, please let me know by Monday!)

Still deciding whether to take a chance and go variable or hedge and stay fixed and if the slightly lower rates are worth putting more $ down (vs investing elsewhere)...
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Feb 2, 2014
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helloder wrote:
Apr 11th, 2019 6:10 pm
Yeah, I was told this morning by Scotiabank rep that when I moved my mortgage to them in 2014, it's not transfer but refinance. I told them I never increased my amortization or my loan, how come it's refinance. He said since it's new mortgage application so it's refinance. Now I'm not sure what will happen to the CMHC insurance I paid in 2009.
Very sad.

It's possible they put you into their collateral charge product (STEP product). They wiped out the insured mortgage charge and registered an uninsured collateral one. This means you lost the CMHC insurance you paid $$$ for.

I've witnessed and heard so many horror stories from bank reps. It should be criminal.
Kevin Somnauth, CFA
Principal Broker - First Toronto Mortgage - MA (Ontario #13176, BC #X301007)
Real Estate Salesperson - Century 21 Innovative
President's Club Award Winner At The Mortgage Architects
PLATINUM CLUB Award Winner At Century 21 Innovative
Newbie
Apr 10, 2019
2 posts
Hi. Anyone dealt with RFA mortgage? Are they reliable. They are giving good rate but not many reviews about RFA.
Newbie
Feb 10, 2014
33 posts
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MONTR
Was offered 3.09% fixed 5years +1000$ by Desjardins..
Seems decent for quebec province?
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Feb 2, 2014
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akhohd wrote:
Apr 11th, 2019 7:15 pm
Was offered 3.09% fixed 5years +1000$ by Desjardins..
Seems decent for quebec province?
2.94% 5-year fixed is available in QC.
Kevin Somnauth, CFA
Principal Broker - First Toronto Mortgage - MA (Ontario #13176, BC #X301007)
Real Estate Salesperson - Century 21 Innovative
President's Club Award Winner At The Mortgage Architects
PLATINUM CLUB Award Winner At Century 21 Innovative
Newbie
Aug 26, 2018
5 posts
Hi

I am a first home buyer in kitchener, i like to have some idea on 5yr fixed rates (25yr and 30yr).

House price: $425,000
Downpayment: 20%
Location: Kitchener
Owner occupied.

Thanks
Deal Addict
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Sep 13, 2011
4968 posts
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9000series wrote:
Apr 11th, 2019 9:07 pm
Hi

I am a first home buyer in kitchener, i like to have some idea on 5yr fixed rates (25yr and 30yr).

House price: $425,000
Downpayment: 20%
Location: Kitchener
Owner occupied.

Thanks
Lowest 5 year fixed rate is 2.89% for 25 years or 3.09% for 30 years.
Paul Meredith
Mortgage Broker, Author
CityCan Financial Corp (lic. 10532)
Newbie
Apr 21, 2018
9 posts
3 upvotes
I've had my mortgage with MCAP for almost 10 years (1 renewal). Their service is excellent. User-friendly online portal. Will consider renewing with them again provided their offer is competitive, though that is certainly not guaranteed as there are often incentives to switch lenders. I have no complaints with their service over the past 10 years and the online portal is user-friendly and intuitive.

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