Real Estate

The Official Mortgage Rates Thread

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Feb 2, 2014
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Explode wrote:
Apr 11th, 2019 10:20 am
I'm looking to refinance my mortgage for a recently purchased home. We recently renewed our mortgage in Oct 2018 for 3 year fixed term with CIBC. We weren't planning on moving but something came up and we have recently bought a new home in March and have a firm offer on our existing home. Our current closing date is June 14.

Current mortgage amount: Estimated ~134K by closing
Maturity Date: Oct 2021
Interest Rate: 3.24% Fixed
Remaining Amortization 7 years.
Approximate market value: 660K Sale Price
Purchase Price of new home: 840K
Required Mortgage: Estimated ~220-230K

Original purchase date (month and year): Sept 2013 (TD)
Did you pay an insurance premium such as CMHC when you purchased the home?: No
Did you refinance your mortgage since you owned your home? If so, what was the year and month when you did the refinance?: Yes, Oct 2018 (CIBC)
Do you have a second component such as a HELOC attached to your mortgage?: Yes, 45K
Current lender: CIBC
Is this your primary residence or a rental property?: Primary Residence
Province: Ontario
Maturity date: Oct 2021
I'm confused by your post.

Are you looking to refinance your current home (as stated) or get a mortgage for a home that you are purchasing?
Kevin Somnauth, CFA
Mortgage Broker - Mortgage Architects (#10287) and Real Estate Salesperson - Century 21 Innovative
President's Club Award Winner At The Mortgage Architects
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newtothisrfd wrote:
Apr 11th, 2019 10:37 am
Long time lurker, first time poster. Would those rates mentioned below apply to my situation?

Purchase Date: June 2014
Purchase Price: $830,000 Concord, ONT
Current estimated value: $1.1 - $1.15 M
No CMHC insurance
No HELOC attached
Never refinanced
Current bank: CIBC
Remaining balance: approximately $330,000
Excellent credit
2.84% 5-year fixed is the best rate for your mortgage.
Kevin Somnauth, CFA
Mortgage Broker - Mortgage Architects (#10287) and Real Estate Salesperson - Century 21 Innovative
President's Club Award Winner At The Mortgage Architects
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CdnRealEstateGuy wrote:
Apr 11th, 2019 12:37 pm
I'm confused by your post.

Are you looking to refinance your current home (as stated) or get a mortgage for a home that you are purchasing?
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.
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If you are looking for a mortgage on a new purchase - this is not a refinance. A refinance is when you get the existing mortgage (still on the same property) and want to take some of the equity our and/or extend the amortization.

On a purchase, the lender will get you a new mortgage.
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.
Andre Oliveira - Mortgage Agent at Valuemortgage
2018 Top 20 National - Mortgage Intelligence
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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?
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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?
Think about that for a moment... if there were hidden fees, how could anyone legally get away with that?

Canadians in general believe that banks are "safe" and "regulated" while anyone else that is not a bank has "hidden clauses", is a "fly by night", has "hidden fees" or other obscure clauses. But reality is that these are lenders that have been in business for over a century (such as Industrial Alliance), some have higher mortgage volumes than some of the banks. These institutions work under the very same guidelines as any other larger or smaller institution.
Often we get clients asking "is that a "class B lender?" or "second tier" lender? There is no such a thing in reality. Even lender that specialize in certain markets (such as equity lending, new employment, bad credit, etc) they still must fulfill a ton of obligation to make sure they are not just disbursing money who cant pay back. Believe it or not, when a client has bad credit and other issues that push them to the real B side of lending, the institutions doing those deals are still required to do a lot of underwriting, using the same principles as any main stream lender does. And these institutions would not be Mcap, Manulife, RMG, First Nat, etc.

Sometimes when a client tells me : "I prefer a bank", I ask them :

Is ICICI Bank a bank?
Is Alterna Bank a bank?
Is Street Capital Bank a bank?
Is Laurentian Bank a bank?

9.5 out of 10 times they have never head of those "banks". To them, "a bank" has to be one of the big 5 or 6, if if the other banks are banks.

Banks in Canada have been able to perpetuate the concept that "safe" relates to themselves. Meanwhile some of those banks are funding the mortgages managed by the monoline lenders. So they have money that goes to fund a mortgage of the bank itself, and some money that goes to a monoline lender, at a lower interest cost, and that monoline lender then lends the money to the client, while servicing the mortgage.

When I send a deal to one of the big banks, I upload documents to a portal (available to brokers only - not to clients), and you would be surprised if you could see the portal.. because the mortgages are serviced by a monoline lender. So the banks themselves trust monoline lenders, while telling their clients to never trust a monoline lender. Funny, eh?

Fun fact - for a few years I worked for a "big bank" - and the bank had all the pensions of several thousand employees managed by... well... a monoline lender.
Andre Oliveira - Mortgage Agent at Valuemortgage
2018 Top 20 National - Mortgage Intelligence
FSCO # 10428
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valuemortgage wrote:
Apr 11th, 2019 1:12 pm
If you are looking for a mortgage on a new purchase - this is not a refinance. A refinance is when you get the existing mortgage (still on the same property) and want to take some of the equity our and/or extend the amortization.

On a purchase, the lender will get you a new mortgage.
Holy cow, why is a bank classifying this mortgage as a "refinance"?
Kevin Somnauth, CFA
Mortgage Broker - Mortgage Architects (#10287) and Real Estate Salesperson - Century 21 Innovative
President's Club Award Winner At The Mortgage Architects
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Mar 13, 2019
4 posts
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
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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.
If you choose to work with your bank on this, I would suggest asking for someone else to handle your mortgage for you as he/she doesn't seem to understand the terminology. The person you choose to handle your mortgage for you can be just as important as rate and terms and conditions.
Paul Meredith
Mortgage Broker, Author
CityCan Financial Corp (lic. 10532)
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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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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
3 posts
Thank you Paul for the info! I will reach to the Forum once again in August.
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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.
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Thanks Andre and Paul for your detailed answers!
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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

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