Real Estate

The Official Mortgage Rates Thread

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Sep 13, 2011
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Toronto
SerenityNow168 wrote: Location: Greater Vancouver area
Looking to borrow: $1.05M
Able to put 20% down
What's the best 5 year fixed rate currently?
Working with a broker and was quoted 2.99% as the best. Was advised that anything lower would be for insured mortgages or special situations like >35% down.

How are people able to get 2.65% on the standard 20% down?
I know it doesn't seem to make a lot of sense, but homes with a purchase price over $1 million will not qualify for the lowest rates unfortunately, regardless of how much you have for down payment. The reasoning is that lenders are unable to securitize the loan when the property is valued at over $1 million (meaning, break it up into smaller pieces or bundle whole mortgages together and then sell them off as mortgage backed securities, or MBS). The lenders ability to do this reduces the cost of funds to that lender, which is a savings they can pass on to the borrower in the form of a lower rate. This is why rates on properties valued at over $1 million are generally higher.

If the purchase price was under $1 million, you be able to get 2.65%. In your situation, the lowest rate would not be that much more, and would fall between 2.69% - 2.79%. Note that most brokers will offer higher rates than these, and your current broker may not even have access to the rates the brokers on this board have. The brokers on this board are willing to receive much lower compensation in order to bring you these lower rates.

Hope this explains. :)

Paul
Paul Meredith
Mortgage Broker, Author
CityCan Financial Corp (lic. 10532)
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Feb 2, 2014
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fisher44 wrote: Thank you for the clarification! Here's all the info:

-How much is the mortgage owing? $290,000
-Roughly, what is the current market value of the property? $525,000
-Which city is the property located in? Ottawa
-Is the property owner-occupied or a rental? Owner-occupied
-Who is your current lender? Merix Financial
-Do you have a HELOC tied to the mortgage? No
-Is the mortgage CMHC insured? Yes
-When did you buy the property? July 30 2015
-When is your renewal date? July 30 2020

Approx. cost of home upgrades is $50k. The work has not started yet but should be complete around July/August.

If you can let me know what my best options are for a regular renewal, and then also to refinance for $340k (290k + 50k) + an understanding of what fees are involved, it would be very appreciated!

Thank you!
If you refinance, you will lose your CMHC insurance. This insurance gives you access to the best rates in the market. Try to avoid refinancing if you can, you do have other financing options.
Kevin Somnauth, CFA
Principal Broker - First Toronto Mortgage - MA (Ontario #13176, BC #X301007)
Real Estate Salesperson - Century 21 Innovative
Newbie
Sep 27, 2017
8 posts
-How much is the mortgage owing? $340,000
-Roughly, what is the current market value of the property? $650,000
-Which city is the property located in? Ottawa
-Is the property owner-occupied or a rental? Owner-occupied
-Who is your current lender? First National
-Do you have a HELOC tied to the mortgage? No
-Is the mortgage CMHC insured? Yes
-When did you buy the property? July 1 2010
-When is your renewal date? July 1 2020
-Current prepayment charge: $2,264

Similar situation as the previous poster, but I'm looking to pull out an extra 150K for renos. What's my best option here? Thanks for the help! (Note: we're probably starting work the last week of June, so we might consider just refinancing at that time and paying the proportional prepayment charge, bringing us to roughly 120 days from now).
Deal Addict
Sep 19, 2012
1252 posts
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Calgary
hamburglar86 wrote: -How much is the mortgage owing? $340,000
-Roughly, what is the current market value of the property? $650,000
-Which city is the property located in? Ottawa
-Is the property owner-occupied or a rental? Owner-occupied
-Who is your current lender? First National
-Do you have a HELOC tied to the mortgage? No
-Is the mortgage CMHC insured? Yes
-When did you buy the property? July 1 2010
-When is your renewal date? July 1 2020
-Current prepayment charge: $2,264
Similar situation as the previous poster, but I'm looking to pull out an extra 150K for renos. What's my best option here? Thanks for the help! (Note: we're probably starting work the last week of June, so we might consider just refinancing at that time and paying the proportional prepayment charge, bringing us to roughly 120 days from now).
My advice: wait for 9 days and apply to Tangerine (can't do it with a broker) for their 5-year fixed. The 2.69% 5-year fixed deal they've got works for refinances and is holdable for 120 days. This is easily the best rate out there and other than the fact that it's a collateral charge (IMO not a big deal since a lot of lenders now cover collateral charge fees to switch) it's a great mortgage. They've got 25/25 prepayment and a consumer friendly prepayment penalty. Anyone doing a refinance should be all over that Tangerine deal right now, it's the winner in the market (for 5-year fixed) by at least 0.05%.

I would not refinance today - you can wait 10 days and get the rate held without paying a penalty. Note: you'd lose your insurance on the refinance but given the size of the amount you want to take out as cash, it makes sense to go with the whole loan refinance as opposed to the "synthetic" refinance (ie: what I suggested to previous poster - take an insured switch (say at 2.39%) and a HELOC (say at prime)).

Good luck!
Nikola Alaica, CPA, CA | Tax, Accounting, Mortgages
Sr. Member
Aug 6, 2014
825 posts
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Ottawa, ON
ahlaker wrote: Unfortunately you’re outside of the 120 day window for which most “good” rates are held. I would come back in a month and hope rates haven’t changed. As for what your strategy would be - IMO you should renew the $290k at those so-called “good” rates (if you were to do it today for 120 days the rate could be 2.39% for 5-years). I would then get a HELOC for the $50k. Even if you’re paying p+0.5% (ie: the standard HELOC rate) you’ll end up with a cheaper effective rate than you would’ve had if you refinanced the whole thing. I suspect the best refinance rate is the Tangerine rate above.
Thanks so much for this. For my own education, am I doing this math correctly?:

Option 1 - Renewal + HELOC

+ $290k @ 2.39% / 5 year term for 20 Years = $700 bi-weekly (using a mortgage calculator online)
+ HELOC - $50k @ 4.2% (3.7% Prime + .5%) for 20 Years = $154 bi-weekly (using a LOC calculator online)

Total payment = $854

Option 2 - Refinance

+ $340k @ 2.69% / 5 year term for 20 Years = $845 bi-weekly


It seems like refinance option would be cheaper, so I must be doing something wrong or not taking something into account.
Newbie
Nov 17, 2019
46 posts
22 upvotes
General question about collateral mortgages. Does monoline lenders nowdays cover for breaking collateral mortgages? Also, can i register the collateral mortgage with the same amount as my purchase price, or is it better to do higher? E.g 120%?
Deal Fanatic
Nov 24, 2013
6059 posts
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Kingston, ON
fisher44 wrote: Thanks so much for this. For my own education, am I doing this math correctly?:

Option 1 - Renewal + HELOC

+ $290k @ 2.39% / 5 year term for 20 Years = $700 bi-weekly (using a mortgage calculator online)
+ HELOC - $50k @ 4.2% (3.7% Prime + .5%) for 20 Years = $154 bi-weekly (using a LOC calculator online)

Total payment = $854

Option 2 - Refinance

+ $340k @ 2.69% / 5 year term for 20 Years = $845 bi-weekly


It seems like refinance option would be cheaper, so I must be doing something wrong or not taking something into account.
Prime’s been 3.95% for about a year now, not 3.70% so that makes a difference. Mind you, BoC could cut rates at some point this year.

That being said, there are a handful of HELOCs available for less than P+0.5%, and also those you can amortize (vs interest-only) for a mortgage-like term and rate).
Newbie
Nov 18, 2019
5 posts
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Looking for an investment property on Vancouver Island. Just wondering if it's worth it to get pre-approved for a mortgage. Currently we have an apartment in Vancouver (est worth $500k +). Any advice or insight on 5 year fixed term mortgage rates are appreciated - thank-you!

-What is the purchase price? Currently looking at a couple places $280K-$300K
-How much is the down payment? will put down 20%
-Where it the property located? Sooke or Port Renfrew
-When is the closing date? TBD
-Will the property be owner-occupied or a rental? rental
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Feb 2, 2014
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Toronto
laur7802 wrote: Looking for an investment property on Vancouver Island. Just wondering if it's worth it to get pre-approved for a mortgage. Currently we have an apartment in Vancouver (est worth $500k +). Any advice or insight on 5 year fixed term mortgage rates are appreciated - thank-you!

-What is the purchase price? Currently looking at a couple places $280K-$300K
-How much is the down payment? will put down 20%
-Where it the property located? Sooke or Port Renfrew
-When is the closing date? TBD
-Will the property be owner-occupied or a rental? rental
Definitely get preapproved. You don’t want waste your time shopping for a property just to find out you can’t get the financing to buy it.
Kevin Somnauth, CFA
Principal Broker - First Toronto Mortgage - MA (Ontario #13176, BC #X301007)
Real Estate Salesperson - Century 21 Innovative
Jr. Member
Jun 30, 2009
170 posts
35 upvotes
Looking to renew our mortgage and CIBC is offering 2.79% on 970K in Toronto. This seems OK but
I keep hearing 2.74 here for million $ mortgage, which major bank is offering that? thanks
Member
Jan 31, 2007
241 posts
12 upvotes
-How much is the mortgage owing? $324k, segmented 48k
-Roughly, what is the current market value of the property? $575-600
-Which city is the property located in? London
-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? 18k
-Is the mortgage CMHC insured? No
-When did you buy the property? June 2015
-When is your renewal date? June 2020

Thanks
Newbie
Oct 15, 2007
91 posts
2 upvotes
Toronto
Hi, I notice mention of 2.39%/5 yr rate a couple times recently.

I assume this is for past years, and that lowest available now is in the 2.64-2.69 region.
Deal Addict
Sep 19, 2012
1252 posts
1851 upvotes
Calgary
fisher44 wrote: Thanks so much for this. For my own education, am I doing this math correctly?:

Option 1 - Renewal + HELOC
+ $290k @ 2.39% / 5 year term for 20 Years = $700 bi-weekly (using a mortgage calculator online)
+ HELOC - $50k @ 4.2% (3.7% Prime + .5%) for 20 Years = $154 bi-weekly (using a LOC calculator online)
Option 2 - Refinance
+ $340k @ 2.69% / 5 year term for 20 Years = $845 bi-weekly
It seems like refinance option would be cheaper, so I must be doing something wrong or not taking something into account.
I did a basic effective rate calc: $290k @ 2.39% = $6,931 interest; $50k @ 4.45% = $2,225 interest. Effective rate = 2.69%. That's the same rate as the refinance with Tangerine. Assuming you get your HELOC setup costs covered in Option 1 (you would if you went with Simplii in 2nd position as they'd charge $150 to set it up), and assuming Tangerine will charge you setup fees (say $1k), you come out ahead with a P+0.5% option (not by much, but you still come out ahead).

As @Mike15 pointed out, you could also get a cheaper HELOC (Motusbank will reportedly do it for 3.95%). They'd charge fees to setup but your effective rate in that case would be 2.62% (so less than the 2.69% at Tangerine).

You're right at the margins, IMO, between a "synthetic refinance" (option 1) or a regular refinance (option 2). Another risk of option 1 is exposure to variable interest rates - but by the same token a refinance nullifies your CMHC insurance so the best rates won't apply in the future. Lots to think about.
ht1004 wrote: General question about collateral mortgages. Does monoline lenders nowdays cover for breaking collateral mortgages? Also, can i register the collateral mortgage with the same amount as my purchase price, or is it better to do higher? E.g 120%?
Some monolines cover it, some don't. 5 years go virtually nobody covered these fees. Times change. As for sizing of your collateral charge registration, it really depends on how married you want to be to your lender. At 120% of purchase price there will be no security for anyone left over so do get access to equity you'll have to deal with your incumbent lender. All depends on how much you like them I suppose.
alkyne wrote: Looking to renew our mortgage and CIBC is offering 2.79% on 970K in Toronto. This seems OK but
I keep hearing 2.74 here for million $ mortgage, which major bank is offering that? thanks
I wouldn't pay a cent more than 2.69% for a 5-year fixed mortgage (Tangerine) these days (on a renewal). Depending on when you bought your house you may even get lower rates.
mugs_64 wrote: -How much is the mortgage owing? $324k, segmented 48k
-Roughly, what is the current market value of the property? $575-600
-Which city is the property located in? London
-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? 18k
-Is the mortgage CMHC insured? No
-When did you buy the property? June 2015
-When is your renewal date? June 2020
Depends on when in June (rate can only be held for 120 days). You could get a free collateral switch at 2.49% (5-year fixed). This would be a full featured mortgage (fair prepayment penalty, no bonafide sales clause, and 20/20 prepayment privileges).
joep2k wrote: Hi, I notice mention of 2.39%/5 yr rate a couple times recently. I assume this is for past years, and that lowest available now is in the 2.64-2.69 region.
Nope - this rate is back. If we're talking 5-year fixed rates for owner occupied properties, IMO your range is between 2.39%-2.69% depending on your individual circumstances. Rentals are a different beast and are likely in the high 2s.
Nikola Alaica, CPA, CA | Tax, Accounting, Mortgages
Jr. Member
Jun 30, 2009
170 posts
35 upvotes
ahlaker wrote: I wouldn't pay a cent more than 2.69% for a 5-year fixed mortgage (Tangerine) these days (on a renewal). Depending on when you bought your house you may even get lower rates.
Thanks for the info. Do you know if HSBC offers anything lower? (Bought the house in 2016)
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Feb 2, 2014
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alkyne wrote: Looking to renew our mortgage and CIBC is offering 2.79% on 970K in Toronto. This seems OK but
I keep hearing 2.74 here for million $ mortgage, which major bank is offering that? thanks
You can get this rate via monoline lender via the broker channel.
Kevin Somnauth, CFA
Principal Broker - First Toronto Mortgage - MA (Ontario #13176, BC #X301007)
Real Estate Salesperson - Century 21 Innovative

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