Real Estate

The Official Mortgage Rates Thread

Newbie
Dec 11, 2019
4 posts
Hello,

I have a split rate mortgage with Scotia (2 partitions). Mort 1 comes due in May, and Mort 2 comes due in Oct. I've been offered an early renewal rate for mort 1 of 2.73% for 5 yr fixed. If I accept, will Scotia take advantage when it's time to renew mort 2? Will I get an sub-par rate?

thank you
Sr. Member
Jun 3, 2012
605 posts
243 upvotes
Scarborough
What is the best rate I can get?

Condo offer has been accepted
City of Toronto
Price: $730,000
20% downpayment
First time homebuyer
Closing: March 2020

Also, is it better for me to lock myself into a rate now or wait until February?
Last edited by airmax95 on Dec 12th, 2019 9:57 pm, edited 1 time in total.
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Jan 31, 2018
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airmax95 wrote: What is the best rate I can get?

Condo offer has been accepted
City of Toronto
Price: $730,000
20% downpayment
First time homebuyer
Closing: March 2020
2.64% 5 yr fixed 20/20 prepayment full featured product

Phil
Phil Cragg
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Mortgage Outlet Inc Broker License #12628
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Sep 19, 2012
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lcyCold wrote: Hello everyone. Just wanted to see what lower options are available before I consult with my local credit union tomorrow. They were advertising 2.59% for fixed 5yrs but who knows if they'll approve or not. RMG also pre-approved me for 2.79% but more options the better!
-What is the purchase price? $880,000
-How much is the down payment? $270,000
-Planned mortgage amount $610,000
-Where it the property located? Vancouver,BC
-When is the closing date? February,2020
-Will the property be owner-occupied or a rental? Owner-occupied
-Gross annual income 84k myself, and 48k from my wife totalling around $132k. Both stable position w/ 15+ yr experience
-Balance on credit card/line of credit
None. Always paid CC in full
-Bank Loans/lease payments No debt whatsoever
If the CU is Vancity I have some information on that 2.59%. It's only available for new purchases for owner occupied houses < $1M. It's got a bonafide sales clause (not necessarily a big deal) and it's termination penalty is apparently heftier than their "standard" mortgage. Vancity typically puts their deals as a collateral charge but this one isn't a collateral charge. Pretty good deal if you have 20% DP. In your case though you've got 30%+ DP so your rates are far better. You should be able to get something like 2.52% on a 5-year fixed with a fair penalty lender (and no bonafide sales clauses).
RaOne1 wrote: I am looking to renew the mortgage on my primary residence in Toronto. Could you please review the following?
House value = $600K
Mortgage balance = $300K
The existing lender is offering me the following terms
1. 5-yr fixed at 2.69%
2. 5 -yr fixed - value flex with the sale clause - at 2.59%
IMO those are crummy rates. You can get a 5-year rate at 2.45% depending on how quickly you close. Worst case scenario is getting the 2.49% with no restriction (ie: fair penalty lender and no bonafide sales clause).
Nikola Alaica, CPA, CA | Tax, Accounting, Mortgages
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Jul 21, 2006
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Should I go 30 year amortization or 25 year amortization 5 year fixed same rate bank offering
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stratux wrote: Should I go 30 year amortization or 25 year amortization 5 year fixed same rate bank offering
Providing they have flexible prepayment privileges, then i'll generally suggest to take the longest amortization possible when rate is the same. You can then increase your payment to match that of the 25 year amortization option. If you maintain that payment throughout the term, then you have something that is 100% equal to having a 25 year amortization. Yet you have the flexibility to revert back to the lower payment at any time. This can really come in handy if you need to increase your cash flow, or if you want to purchase a rental property and need to lower your debt to income ratio to qualify.

As mentioned above, your bank will need to have flexible prepayment privileges, so let them know wha you are planning. Some of the banks will limit you to only 10/10 prepayment privileges, and will limit you to a lump sum payment only one time per year. Most of them however will let you double up your payments, which would allow you to use this strategy.

Speak to your bank and let them know what you would like to do. Be weary of any advice given by the mortgage specialist at the bank (or any broker for that matter) unless you have asked them questions about their experience level. Never assume that just because they work for the bank that you're getting quality advice. Often they put entry level people in these positions. Just make sure you ask a lot of questions before choosing someone to set up your mortgage for you. A mortgage is a huge financial decision. Don't trust it to just anyone. I would suggest reading these articles if dealing with your bank directly:

http://www.cbc.ca/…/td-bank-employees-a ... eaking-law
http://www.cbc.ca/beta/news/business/ba ... -1.4023575
https://www.thestar.com/business/2017/0 ... ation.html

There are some really bad mortgage specialists out there, just as there are some really bad brokers. There are also some great ones, so just make sure you ask a lot of questions.

I digress. The initial amortization is quite irrelevant as soon as you start using you prepayment privileges. With the more flexible prepayment privileges available from some lenders, a 30 year mortgage could be paid off in less than 4 years, without incurring a penalty. The initial amortization is meaningless in this sense.

Hope you find this helpful. :)

Paul
Paul Meredith
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Pacon12 wrote: Hello,

I have a split rate mortgage with Scotia (2 partitions). Mort 1 comes due in May, and Mort 2 comes due in Oct. I've been offered an early renewal rate for mort 1 of 2.73% for 5 yr fixed. If I accept, will Scotia take advantage when it's time to renew mort 2? Will I get an sub-par rate?

thank you
The problem with these split mortgages, is they are "difficult" to transfer.

You either have to transfer when the first mortgage becomes due and pay the penalty to break and transfer the 2nd one. Or you renew the first mortgage into short or open term (paying a high rate), and move it along with the 2nd mortgage when that is due.
Kevin Somnauth, CFA
Principal Broker - First Toronto Mortgage - MA (Ontario #13176, BC #X301007)
Real Estate Salesperson - Century 21 Innovative
Newbie
Apr 9, 2019
2 posts
Hi everyone, mortgage for my primary residence is coming for renewal. I am currently on a variable at 3.55% Wondering if I should go variable or fixed. My current lender CIBC is offering me fixed for 3 yr @ 2.89% and 4 yr @ 2.82% whereas variable closed for 3yr @ 3.01% and 5yr @ 3.15%. Any advice will be helpful.

-How much is the mortgage owing?
~596,000
-Roughly, what is the current market value of the property?
870,000
-Which city is the property located in?
Milton
-Is the property owner-occupied or a rental?
Owner occupied
-Who is your current lender?
CIBC
-Do you have a HELOC tied to the mortgage?
Yes (CIBC Home Power Plan) but haven't used it
-Is the mortgage CMHC insured?
No
-When did you buy the property?
Jan 2017
-When is your renewal date?
Jan 17 2020

Regards,
Sam
Banned
Dec 10, 2019
117 posts
41 upvotes
PhilipT wrote: Any experience or advice on MCAP vs Scotiabank?

Conditionally approved at 2.59 w/ MCAP vs 2.79 at Scotia.
Scotia's argument is on flexibility and that their product is better because there are cases where you don't have to pay the full penalty to get out of it. MCAP mortgage also has the "have to sell to get out" clause but that honestly doesn't bother me. It's my first house and I don't plan on moving for at least 10+ years otherwise I'd keep renting. So unless something totally crazy happens I don't see us having to pay penalties w/in 5 year timeframe of the mortgage. (but then, nobody predicts these things so everybody probably says that lol)
Rate difference saves about ~$1k in interest in year one alone by my math.

Am I overthinking it? Should I just take the lower rate and run or is there fine print I should be worried about with MCAP?

Edit: Scotia offered to match or give me a cheque for the difference in interest over 5 years. So I guess the point is moot.
Seriously go with a Big Bank. Theres the misperception that smaller lenders are the same as the Big 5 Bank, but just speaking from experience, couldn't be farther from the truth. One smaller lender almost ruined my closing date by asking for last minute information. Good thing I had a Big 5 as a backup.

The argument will be, one experience does not define all, but just look at MCAPs google reviews..says it all. If you can qualify for a Big 5, go to a Big 5.
Banned
Sep 19, 2012
1253 posts
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Calgary
SamTon wrote: Hi everyone, mortgage for my primary residence is coming for renewal. I am currently on a variable at 3.55% Wondering if I should go variable or fixed. My current lender CIBC is offering me fixed for 3 yr @ 2.89% and 4 yr @ 2.82% whereas variable closed for 3yr @ 3.01% and 5yr @ 3.15%. Any advice will be helpful.
-How much is the mortgage owing? ~596,000
-Roughly, what is the current market value of the property? 870,000
-Which city is the property located in? Milton
-Is the property owner-occupied or a rental? Owner occupied
-Who is your current lender?CIBC
-Do you have a HELOC tied to the mortgage?Yes (CIBC Home Power Plan) but haven't used it
-Is the mortgage CMHC insured?No
-When did you buy the property?Jan 2017
-When is your renewal date?Jan 17 2020
First thing: those rates are offensive. I would tell CIBC to pound sand.

Next thing: IMO the decision between fixed or variable is dependent on your view of interest rates and whether you think you're going to break the mortgage. If you think rates are going to decrease, on a net basis, over the next 5 years (compared to the 5-year fixed), then go variable. If you think you're going to break the mortgage in the next 5 years, you're probably better going variable. If neither of those apply then go fixed. I would run a few scenarios (a broker like me or the others in the thread) can help with that, and you can pick which one you think is most likely. Personally I would go variable but I love flexibility and am an interest rate bear.

In terms of what you're looking at for rates/products:
  • 5-year fixed with all fees covered (discharge, appraisal, collateral switch) could be had at 2.49% (fair penalty and no bonafide sales clause).
  • 5-year variable with Motusbank at p-1.21 (bonafide sale clause, and you'd have to negotiate with them to see which fees are covered). A fully unrestricted deal with all fees covered is probably around p-1.15%.
Shorter terms are more expensive at the moment (yippie for the inverted yield curve!)

NB: for more details around "bonafide sales clause" and "fair penalties" read these great @RateSpy articles:
https://www.ratespy.com/bona-fide-sale- ... p-05309587
https://www.ratespy.com/fair-penalty-le ... s-05109252
https://www.ratespy.com/competitors-att ... -083110523

Good luck!

Nikola Alaica, CPA, CA | Tax, Accounting, Mortgages
Nikola Alaica, CPA, CA | Tax, Accounting, Mortgages
Deal Addict
Mar 27, 2004
4087 posts
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Toronto
I just got a conventional 5 year fixed 30y amortization at 2.69 from cibc. applied this week. closing property end of jan.

the word is rbc is raising rates next week.

for my sister actually, also got cash rebate for first time home buyer of $1200.

Message me if anyone wants contact.
Full-time Realtor
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Dec 11, 2017
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It looks like bank fixed rates for renewals are around the 3.10% mark, making them very close to variable rates. For example, RBC's prime rate is 3.95 and if they offer -0.8 for variable that brings the rates in very close alignment. Almost all the discussion I'm seeing in here is for new mortgages and for fixed rates, however there have got to be a lot of people renewing as well. Don't forget to look at variable rates as well.
Newbie
Dec 16, 2018
6 posts
Nova Scotia
Looking for 5 year Fixed & Variable rates for a Refinance. I currently have a HELOC with RBC

-Current Market Value is ~$1M
-Currently Owing ~$450k
-Looking to Refinance for ~$650k (pay off car loans and some renovations)
-Owner Occupied
-Located in Halifax, Nova Scotia
-Close in Jan'20

Thanks
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Feb 2, 2014
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glasses00 wrote: It looks like bank fixed rates for renewals are around the 3.10% mark, making them very close to variable rates. For example, RBC's prime rate is 3.95 and if they offer -0.8 for variable that brings the rates in very close alignment. Almost all the discussion I'm seeing in here is for new mortgages and for fixed rates, however there have got to be a lot of people renewing as well. Don't forget to look at variable rates as well.
That's because they are offering horrendous rates.

If you go with a non-bank lenders, rates still start at 2.44% 5-year fixed, which makes fixed very appetizing.
Kevin Somnauth, CFA
Principal Broker - First Toronto Mortgage - MA (Ontario #13176, BC #X301007)
Real Estate Salesperson - Century 21 Innovative
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Feb 2, 2014
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ScottM89507 wrote: Looking for 5 year Fixed & Variable rates for a Refinance. I currently have a HELOC with RBC

-Current Market Value is ~$1M
-Currently Owing ~$450k
-Looking to Refinance for ~$650k (pay off car loans and some renovations)
-Owner Occupied
-Located in Halifax, Nova Scotia
-Close in Jan'20

Thanks
What is RBC offering you for the refi and are they giving you a discount on the penalty if you refi with them (assuming you are breaking mid term)?
Kevin Somnauth, CFA
Principal Broker - First Toronto Mortgage - MA (Ontario #13176, BC #X301007)
Real Estate Salesperson - Century 21 Innovative

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