Real Estate

The Official Mortgage Rates Thread

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Feb 2, 2014
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AnitaA77780 wrote: Help - I have to move fast and didn't realize it takes 30 days to move a mortgage! Should I go bank or credit union? Does the institution I move to typically cover legal fees?
How much is the mortgage owing? ~235k
Roughly, what is the current market value of the property? $500k
Which city is the property located in? Toronto
Is the property owner-occupied or a rental? Owner occupied
Who is your current lender? RBC
Do you have a HELOC tied to the mortgage? No
Is the mortgage CMHC insured? No
When did you buy the property? 2015
When is your renewal date? Jan 28 , 2020
Current mortgage rate: 2.79
Jan 28 is fine, don't worry. And you will get a rate better than you have right now with legal fees covered :)

Best rate is 2.69% 5-year fixed for your particular transaction.
Last edited by CdnRealEstateGuy on Dec 28th, 2019 11:33 am, edited 2 times in total.
Kevin Somnauth, CFA
Principal Broker - First Toronto Mortgage - MA (Ontario #13176, BC #X301007)
Real Estate Salesperson - Century 21 Innovative
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AnitaA77780 wrote: Help - I have to move fast and didn't realize it takes 30 days to move a mortgage! Should I go bank or credit union? Does the institution I move to typically cover legal fees?
How much is the mortgage owing? ~235k
Roughly, what is the current market value of the property? $500k
Which city is the property located in? Toronto
Is the property owner-occupied or a rental? Owner occupied
Who is your current lender? RBC
Do you have a HELOC tied to the mortgage? No
Is the mortgage CMHC insured? No
When did you buy the property? 2015
When is your renewal date? Jan 28 , 2020
Current mortgage rate: 2.79
Thanks for the info! The lowest 5 year fixed rate for your situation is 2.74%. Yes, it generally takes 30 days to complete a switch. If it ends up running a little late, then RBC would just put you into an open mortgage at maturity. The open rates are high, usually around 7%, however this is an annual rate and you should only need it for a few days (if at al).
Paul Meredith
Mortgage Broker, Author
CityCan Financial Corp (lic. 10532)
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oz9106 wrote: Pre-approved for 440k at one of the big banks. Looking for the best rate out there with lump-sum payment option.
Thank you :)

-What is the purchase price? PP = 570695, total funds required to close = $602004 due to gst/ptt
-How much is the down payment? 197004
-Where it the property located? Vancouver, BC
-When is the closing date? Mid to late Feb 2020 (depending on developer completion)
-Will the property be owner-occupied or a rental? Owner occupied with roommate rental income
2.70% - 2.75% 5-year fixed is the best rate in BC right now.
Kevin Somnauth, CFA
Principal Broker - First Toronto Mortgage - MA (Ontario #13176, BC #X301007)
Real Estate Salesperson - Century 21 Innovative
Newbie
May 24, 2013
12 posts
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Toronto
Happy holidays everyone. Looking for 2 rates if possible.

1. best rate from a big bank
2 best rate from any reputable lender

-What is the purchase price? 670k
-How much is the down payment? 20% - can be slightly more or less if necessary
-Where it the property located? Toronto condo
-When is the closing date? Feb 26 - can be moved if necessary
-Will the property be owner-occupied or a rental? owner-occupied
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thearun wrote: Happy holidays everyone. Looking for 2 rates if possible.

1. best rate from a big bank
2 best rate from any reputable lender

-What is the purchase price? 670k
-How much is the down payment? 20% - can be slightly more or less if necessary
-Where it the property located? Toronto condo
-When is the closing date? Feb 26 - can be moved if necessary
-Will the property be owner-occupied or a rental? owner-occupied
Thanks for the info! Lowest 5 year fixed rate for your situation would be 2.79% with a non-bank lender, or 2.95% with a major bank. If accepting a fixed rate mortgage with a major bank, you always want to proceed with caution, as the penalty to break the mortgage early can be as much as 500% higher than most of the non-bank lenders. Prepayment privileges are often (but not always) more limited with the major banks as well.

There are many who think that going with a lender who is not a bank is more risky, or that there are hidden fees or restrictions. Nothing could be further from the truth here. If there is any area of particular concern, please post it here and we'd be happy to address it for you. I've seen people pay as much as $10,000 higher over the mortgage term for the sole reason of having it with a major bank. Why would anyone do this? I ask myself that all the time. It's generally due to erroneous information provided to them by their family or peers, or due to false information provided to them by the banks themselves. Just make sure you do your research and ask a lot of questions. The person you have advising you on your mortgage is just as important a the rate and lender itself. Take a look at these articles if dealing with the banks 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 good and bad on both the bank and the broker side. There are some really great bank mortgage specialists, just as there are many great brokers. This is why it's important to choose wisely, and ask a lot of questions.
Paul Meredith
Mortgage Broker, Author
CityCan Financial Corp (lic. 10532)
Deal Fanatic
User avatar
Feb 2, 2014
7768 posts
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thearun wrote: Happy holidays everyone. Looking for 2 rates if possible.

1. best rate from a big bank
2 best rate from any reputable lender

-What is the purchase price? 670k
-How much is the down payment? 20% - can be slightly more or less if necessary
-Where it the property located? Toronto condo
-When is the closing date? Feb 26 - can be moved if necessary
-Will the property be owner-occupied or a rental? owner-occupied
2.74% 5-year fixed is the best rate with a very large and reputable lender, but not a Big 5.

You’re making a mistake if you assume the Big 5 offer a better mortgage product...if anything, it’s the other way around.
Kevin Somnauth, CFA
Principal Broker - First Toronto Mortgage - MA (Ontario #13176, BC #X301007)
Real Estate Salesperson - Century 21 Innovative
Banned
Sep 19, 2012
1253 posts
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Calgary
oz9106 wrote: Pre-approved for 440k at one of the big banks. Looking for the best rate out there with lump-sum payment option.
Thank you :)

-What is the purchase price? PP = 570695, total funds required to close = $602004 due to gst/ptt
-How much is the down payment? 197004
-Where it the property located? Vancouver, BC
-When is the closing date? Mid to late Feb 2020 (depending on developer completion)
-Will the property be owner-occupied or a rental? Owner occupied with roommate rental income
I think your lowest rate will be 2.69% on a 5-year fixed. This is a "fair penalty" lender with good prepayment privileges. Whether it's the best deal depends on your view of interest rates - if you think they're staying steady then lock in for 5-years. If you think they're going to decrease over the next 5-years, maybe variable is a better bet.
AnitaA77780 wrote: Help - I have to move fast and didn't realize it takes 30 days to move a mortgage! Should I go bank or credit union? Does the institution I move to typically cover legal fees?
How much is the mortgage owing? ~235k
Roughly, what is the current market value of the property? $500k
Which city is the property located in? Toronto
Is the property owner-occupied or a rental? Owner occupied
Who is your current lender? RBC
Do you have a HELOC tied to the mortgage? No
Is the mortgage CMHC insured? No
When did you buy the property? 2015
When is your renewal date? Jan 28 , 2020
Current mortgage rate: 2.79
IMO the best rate in your case is 2.66% on a 5-year fixed. This is with a "fair penalty" lender (as I mentioned below).

Generally speaking there are 3 fees to pay when switching a mortgage: appraisal, legal and discharge. Most lenders will cover the legal fees and appraisal fees (if any). There are at least two that I know that will cover discharge/assignment fees (RMG and Think Financial) but no other lenders seem to cover that (they'll let you add it to your new mortgage). You can always ask your broker (if going with a broker) to throw in some cash post-closing to help offset that discharge fee.

Good luck!
thearun wrote: Happy holidays everyone. Looking for 2 rates if possible.
1. best rate from a big bank
2 best rate from any reputable lender
-What is the purchase price? 670k
-How much is the down payment? 20% - can be slightly more or less if necessary
-Where it the property located? Toronto condo
-When is the closing date? Feb 26 - can be moved if necessary
-Will the property be owner-occupied or a rental? owner-occupied
From what I can see:
  • Best rate from "reputable lender" for your situation is 2.69% from Meridian Credit Union. You can get that with a broker but not all will offer it. For a mortgage your size I'm sure you can find a broker though :-)
  • Best rate from a "big bank" would be 2.79% from HSBC. Very few (if any?) brokers can organize this mortgage for you though.
Both of these mortgages have rougher prepayment penalties than ones from "fair penalty" lenders. Read here if you want to know more:
https://www.ratespy.com/fair-penalty-le ... s-05109252

I have no idea what lenders are being quoted by @PaulMeredith or @CdnRealEstateGuy so I can't speak to whether those rates come with a "fair prepayment" penalty. IMO the best rate for your situation with a "fair prepayment" penalty is with Motusbank at 2.79%.

*Note that all the rates quoted are 5-year fixed rates. You may be able to do better with big-banks on shorter terms but that'll be up to your negotiating skills. I can't see any better rates with non-bank lenders on shorter terms.

**Just in this thread you've got three different brokers quoting what they believe are the lowest rates. Why? Some brokers have access to certain lenders while others don't. Some brokers won't quote rates that they can't organize. Some brokers won't buy down the rate (ie: sacrifice commission in order to reduce the rate, no cost to lender) as much as other brokers. Whatever you do, keep doing your research!! (and don't believe everything your read on the internet!!)

Good luck everyone! Merry Christmas and Happy New Year!!

Nikola Alaica, CPA, CA | Tax, Accounting, Mortgages
Last edited by ahlaker on Jan 23rd, 2020 1:37 pm, edited 1 time in total.
Newbie
May 24, 2013
12 posts
16 upvotes
Toronto
Thanks for the response. Out of curiosity, what makes motusbank mortgages more attractive than meridian? I read on here that the terms were nearly identical.

ahlaker wrote: I think your lowest rate will be 2.69% on a 5-year fixed. This is a "fair penalty" lender with good prepayment privileges. Whether it's the best deal depends on your view of interest rates - if you think they're staying steady then lock in for 5-years. If you think they're going to decrease over the next 5-years, maybe variable is a better bet.



IMO the best rate in your case is 2.66% on a 5-year fixed. This is with a "fair penalty" lender (as I mentioned below).

Generally speaking there are 3 fees to pay when switching a mortgage: appraisal, legal and discharge. Most lenders will cover the legal fees and appraisal fees (if any). There are at least two that I know that will cover discharge/assignment fees (RMG and Think Financial) but no other lenders seem to cover that (they'll let you add it to your new mortgage). You can always ask your broker (if going with a broker) to throw in some cash post-closing to help offset that discharge fee.

Good luck!



From what I can see:
  • Best rate from "reputable lender" for your situation is 2.69% from Meridian Credit Union. You can get that with a broker but not all will offer it. For a mortgage your size I'm sure you can find a broker though :-)
  • Best rate from a "big bank" would be 2.79% from HSBC. Very few (if any?) brokers can organize this mortgage for you though.
Both of these mortgages have rougher prepayment penalties than ones from "fair penalty" lenders. Read here if you want to know more:
https://www.ratespy.com/fair-penalty-le ... s-05109252

I have no idea what lenders are being quoted by @PaulMeredith or @CdnRealEstateGuy so I can't speak to whether those rates come with a "fair prepayment" penalty. IMO the best rate for your situation with a "fair prepayment" penalty is with Motusbank at 2.79%.

*Note that all the rates quoted are 5-year fixed rates. You may be able to do better with big-banks on shorter terms but that'll be up to your negotiating skills. I can't see any better rates with non-bank lenders on shorter terms.

**Just in this thread you've got three different brokers quoting what they believe are the lowest rates. Why? Some brokers have access to certain lenders while others don't. Some brokers won't quote rates that they can't organize. Some brokers won't buy down the rate (ie: sacrifice commission in order to reduce the rate, no cost to lender) as much as other brokers. Whatever you do, keep doing your research!! (and don't believe everything your read on the internet!!)

Good luck everyone! Merry Christmas and Happy New Year!!

Nikola Alaica, CPA, CA | Tax, Accounting, Mortgages
Banned
Sep 19, 2012
1253 posts
1859 upvotes
Calgary
thearun wrote: Thanks for the response. Out of curiosity, what makes motusbank mortgages more attractive than meridian? I read on here that the terms were nearly identical.
Prepayment penalty. Motusbank is a "fair penalty" lender whereas Meridian is not. You could pay 4-5 times more if you break a Meridian mortgage earlier than a Motusbank one. There is a realistic scenario that says taking a deal with a 0.1% premium on rate (but with a "fair penalty") will end up cheaper overall versus a "non-fair penalty" deal. It depends, of course, on the likelihood that you break your mortgage early. A good broker should be able to model out a few scenarios for you (a savvy customer could/should be doing that calculation themselves!!).

This is why @PaulMeredith always says (and I agree!) that rate isn't the only thing to watch for when shopping for a mortgage. That said, we're not very good at debunking that myth, especially when we spit out one line sentences that say something like: "the lowest rate is x% on a 5-year fixed". My advice: educate yourself and do all kinds of due diligence. Hell, I did so much of that DD I ended up a broker myself. If you don't feel so inclined, work with a broker or banker that will give you the straight goods (put another way, is trustworthy). Honestly it's no different thank picking a mechanic or accountant or lawyer.

Hope this helps! Happy New Year!
Nikola Alaica, CPA, CA | Tax, Accounting, Mortgages
Sr. Member
Jul 20, 2007
595 posts
171 upvotes
Hi, just a couple of questions:

1. Does Alterna allow porting?
2. Is the IRD for Alterna based on promotional or posted rates? If posted, what makes the prepayment penalty better than a big bank?

Thanks!
Jr. Member
Jan 14, 2014
119 posts
120 upvotes
Toronto
Hi everyone. Want to check a rate I was given for high-ratio preapproval (2.74%). Household income 200k+, credit scores 800+.

-What is the purchase price? 650-850k range
-How much is the down payment? 5% + minimum
-Where it the property located? Toronto townhouse (condo or freehold)
-When is the closing date? Hoping sometime in Feb/March
-Will the property be owner-occupied or a rental? Owner-occupied
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Feb 2, 2014
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davisml wrote: Looking to get some guidance as we plan our move in 2020.

We own our condo outright (valued at $1M) with no mortgage and looking to trade up to a house valued at $1.5M.
We want to buy a house in the spring and renovate it for 3-4 months while living in our condo.
After raiding the TFSA/savings we have about $300K for a downpayment plus another $150K for renovations.
Once the house is renovated, we want to sell the condo and put it towards the house downpayment. Is a bridge loan the only way to make this work or something else we should consider?
Also we want the mortgage with an automatically readvanceable HELOC for use with SM.
Household income: $340K, 800+ scores, 0 debt.

For a purchase of a property:
-What is the purchase price? $1.5M
-How much is the down payment? $300K cash (plus around $1M after selling condo)
-Where it the property located? Toronto ON
-When is the closing date? late March
-Will the property be owner-occupied or a rental? Owner Occupied
For a bridge loan, the underlying property has to be sold firm. So condo has to be sold firm before closing the house, which isn’t the case here.

You can make a lump sum payment of 20% per year, so you can pay it off in full within 5 years with a typical closed mortgage. Best rate is 2.74% 5-year fixed for a million dollar purchase.

If that’s not suffice, then you can finance the portion you want to payoff from the sale with a LOC which is a completely open product. Downfall, best rate is Prime on a loc. So open product, but higher rate.
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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testzzz wrote: Hi everyone. Want to check a rate I was given for high-ratio preapproval (2.74%). Household income 200k+, credit scores 800+.

-What is the purchase price? 650-850k range
-How much is the down payment? 5% + minimum
-Where it the property located? Toronto townhouse (condo or freehold)
-When is the closing date? Hoping sometime in Feb/March
-Will the property be owner-occupied or a rental? Owner-occupied
There are MUCH better rates out there, but you need to have an accepted offer first.
Kevin Somnauth, CFA
Principal Broker - First Toronto Mortgage - MA (Ontario #13176, BC #X301007)
Real Estate Salesperson - Century 21 Innovative
Member
May 30, 2009
208 posts
17 upvotes
Richmond Hill
Hi All,

My mortgage is up and looking for renewal.

Mortgage amount owing at maturity : $ 217,000
Approximate market value: Roughly $520,000
Original Purchase Price: $315,000
CMHC: No
Do you have a second component such as a HELOC attached to your mortgage? Yes. $ 138,000 HELOC.
Current lender: Scotiabank
Is this your primary residence or a rental property? Rental
Location: Etobicoke, Ontario
Credit Score: 715
Maturity date: May 28, 2020

Any recommendations? I'm also thinking of selling the property as well but any advice for both scenario (renewal or sale) would be greatly appreciated.
Newbie
May 24, 2013
12 posts
16 upvotes
Toronto
Thanks again for the responses. After taking what you’ve said into account, I will ask my question a different way.

1. What is the absolute lowest rate available in my situation? If I have almost no plans to sell in the next 5 years, would you still advise against taking this rate?
2. What is the lowest rate from a fair penalty lender?

I do need to get a move on with the approval process, so feel free to pm if you have a competitive offer.

Thanks for your help everyone.

PaulMeredith wrote: Thanks for the info! Lowest 5 year fixed rate for your situation would be 2.79% with a non-bank lender, or 2.95% with a major bank. If accepting a fixed rate mortgage with a major bank, you always want to proceed with caution, as the penalty to break the mortgage early can be as much as 500% higher than most of the non-bank lenders. Prepayment privileges are often (but not always) more limited with the major banks as well.

There are many who think that going with a lender who is not a bank is more risky, or that there are hidden fees or restrictions. Nothing could be further from the truth here. If there is any area of particular concern, please post it here and we'd be happy to address it for you. I've seen people pay as much as $10,000 higher over the mortgage term for the sole reason of having it with a major bank. Why would anyone do this? I ask myself that all the time. It's generally due to erroneous information provided to them by their family or peers, or due to false information provided to them by the banks themselves. Just make sure you do your research and ask a lot of questions. The person you have advising you on your mortgage is just as important a the rate and lender itself. Take a look at these articles if dealing with the banks 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 good and bad on both the bank and the broker side. There are some really great bank mortgage specialists, just as there are many great brokers. This is why it's important to choose wisely, and ask a lot of questions.
CdnRealEstateGuy wrote: 2.74% 5-year fixed is the best rate with a very large and reputable lender, but not a Big 5.

You’re making a mistake if you assume the Big 5 offer a better mortgage product...if anything, it’s the other way around.
ahlaker wrote: I think your lowest rate will be 2.69% on a 5-year fixed. This is a "fair penalty" lender with good prepayment privileges. Whether it's the best deal depends on your view of interest rates - if you think they're staying steady then lock in for 5-years. If you think they're going to decrease over the next 5-years, maybe variable is a better bet.
IMO the best rate in your case is 2.66% on a 5-year fixed. This is with a "fair penalty" lender (as I mentioned below).

Generally speaking there are 3 fees to pay when switching a mortgage: appraisal, legal and discharge. Most lenders will cover the legal fees and appraisal fees (if any). There are at least two that I know that will cover discharge/assignment fees (RMG and Think Financial) but no other lenders seem to cover that (they'll let you add it to your new mortgage). You can always ask your broker (if going with a broker) to throw in some cash post-closing to help offset that discharge fee.

Good luck!
From what I can see:
  • Best rate from "reputable lender" for your situation is 2.69% from Meridian Credit Union. You can get that with a broker but not all will offer it. For a mortgage your size I'm sure you can find a broker though :-)
  • Best rate from a "big bank" would be 2.79% from HSBC. Very few (if any?) brokers can organize this mortgage for you though.
Both of these mortgages have rougher prepayment penalties than ones from "fair penalty" lenders. Read here if you want to know more:
https://www.ratespy.com/fair-penalty-le ... s-05109252

I have no idea what lenders are being quoted by @PaulMeredith or @CdnRealEstateGuy so I can't speak to whether those rates come with a "fair prepayment" penalty. IMO the best rate for your situation with a "fair prepayment" penalty is with Motusbank at 2.79%.

*Note that all the rates quoted are 5-year fixed rates. You may be able to do better with big-banks on shorter terms but that'll be up to your negotiating skills. I can't see any better rates with non-bank lenders on shorter terms.

**Just in this thread you've got three different brokers quoting what they believe are the lowest rates. Why? Some brokers have access to certain lenders while others don't. Some brokers won't quote rates that they can't organize. Some brokers won't buy down the rate (ie: sacrifice commission in order to reduce the rate, no cost to lender) as much as other brokers. Whatever you do, keep doing your research!! (and don't believe everything your read on the internet!!)

Good luck everyone! Merry Christmas and Happy New Year!!

Nikola Alaica, CPA, CA | Tax, Accounting, Mortgages

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