Real Estate

The Official Mortgage Rates Thread

Newbie
Mar 4, 2020
7 posts
6 upvotes
Request any mortgage expert for suggestions-
I had received a quote of Prime-1.25% variable ARM rate from CMLS (commitment received few weeks back) vs. I have to compare with Scotia eHome 2.19% fixed rate (had locked it earlier on website). I am inclined towards taking variable one looking at the current conditions. Thought that I would go for converting it to fixed if the prime jumps after an 1.5 to 2 years. Does this make sense?

Few queries that I have-
  • The calculation for monthly payment they have mentioned seems to be based on 3.45 Prime-1.25%. But the current prime is less on their website at 2.95% and CMLS still has to be announce drop to 2.45%. So, should I strike this and update the payment there? Or let it be there like that and Variable EMIs would anyways go down on its own anyways whether I do it or not?
  • Total cost of borrowing- It shows that we have to pay an XYZ amount based on 2.5% APR. But isn't APR in a variable rate mortgage supposed to be changing based on the interest rates? How can this be fixed?
  • In the commitment letter that I have to sign and share back, I see that it has compounding frequency- 'Monthly not in advance'. Because of monthly compounding instead of semi-annually, I see a increase of $4 per month in EMI which I found Ok. But what does it mean by 'not in advance'?
Thanks.
Sr. Member
User avatar
Dec 2, 2008
742 posts
270 upvotes
Masterden2016 wrote: Hello Everyone!

I'm closing on April 27th, and my rate from my bank is 2.49% for a 5 year fixed locked in from a few weeks ago. I have the 20% down. Any advice on this rate? I don't mind variable, but it seems like those greats from last month are a thing of the past.
Do you have a variable rate locked in from a few weeks ago as well?
Deal Addict
Feb 27, 2008
1348 posts
528 upvotes
@Skrish All these are good questions for your mortgage broker. Have you asked them? I have a commitment with CMLS and you're asking good questions..
Newbie
Mar 28, 2020
1 posts
Hi everyone,

My wife and I are in the process of buying a new secondary property with the intention of renting both units. The offer was signed by both parties and the closing date is 17 Aug 2020. We dealt so far with a local mortgage broker who was referred by our realtor and got approved for a 5 year fixed mortgage at 3.09% with First National. I was expecting a better rate considering what I have seen other investors getting for their income properties lately.

I would like to know if we can get a better rate to maximize our investment on a fixed rate conventional and 20 years amortization mortgage? I am also aware that we are 3 weeks outside the 120 days window but would like to lock in a rate when we will be able to. Here are our info:

-What is the purchase price? 470,000$
-How much is the down payment? 20% / 94,000$
-Where it the property located? Ontario
-When is the closing date? 17 Aug 2020
-Will the property be owner-occupied or a rental? Rental
-Additional info: Our credit score is between 780-800. Household income is 196,000$. We have a mortgage of 205,000$ on our principal residence which is valued at 525,000$. We just took a 100,000$ HELOC (pre-approved) as a backup to cover the HST, closing fees and appliances for both units in case the estate which my wife is a beneficiary doesn't probate before de closing date (COVID-19 potential delays).

Thank you in advance.
Sr. Member
Oct 5, 2005
736 posts
105 upvotes
On a variable rate mortgage, $2.3 MM Ontario home and $1.3 MM mortgage, are the front runners Desjardins P - 0.5%, Canada Life P - 0.39%, and Motusbank ? Any other deal on variable rate please?
Banned
Sep 19, 2012
1253 posts
1859 upvotes
Calgary
Mike15 wrote: That’s been the reason up until now, but not only has the GoC 5y bond yield held down at 0.76bps or lower all week, BoC has announced purchases of Canada Mortgage Bonds that with CMHC/government backing should drive CMB yields down as well. Surely at some point the spread will start to come down?
SaskCanesFan wrote: Doubt it. I mean, it would make sense, but so would variable rates going down and instead they've skyrocketed. Banks are basically just taking the opportunity to price gouge people because they can.
Despite the fact that this is a (very) cynical view, I would agree with it wholeheartedly. There is absolutely no reason for insured rates at the banks and monoline lenders to be in the high twos. They're likely pointing at credit spreads and other risks but IMO this is rubbish. Have a look here - the government just bought $110MM of CMB at a "normal" spread vs the similarly dated GoC yield.
240sxer wrote: Oh really? I thought once I sign the commitment, I'm "committed". So there's another pile of signatures needed after the lawyer does his job? Interesting.. But the lender cannot back out now can they?
Sure the lender can back out. Read the commitment letter carefully, there is language to the effect of "Any misrepresentation of fact contained in your application or other documentation entitles us to decline to advance all or any portion of the loan". There are going to be other conditions in your commitment letter too (one of which is verbal confirmation of employment). If the lender doesn't "waive" that condition, for example, until the last moment, then they can back out if they find out you've been laid off. Do a google search as there have been cases recently where the lender verifies employment just prior to closing, determines that the borrower was unemployed and then declines to fund.
dhavalpatel434 wrote: I am a first time poster, but have been following RFD for a while. Since the Interest dropped recently, I am looking to change my mortgage from closed variable to Fixed (depending on what rate I get from lenders)
Why would you change from variable to fixed? Is your variable rate something like p+x%? Unless it is, I would highly advise against locking in right now.
Masterden2016 wrote: I'm closing on April 27th, and my rate from my bank is 2.49% for a 5 year fixed locked in from a few weeks ago. I have the 20% down. Any advice on this rate? I don't mind variable, but it seems like those greats from last month are a thing of the past.
There is much better: @AnthonyC18 has Canada Life on a 5-year fixed at 2.31% (quick close). You could also go with Desjardins at p-0.5% (which works out to 1.95%). IMO either is a great option. NB: Canada Life is a fair penalty lender and is a far better selection than any of the big banks.
Skrish wrote: Request any mortgage expert for suggestions-
I had received a quote of Prime-1.25% variable ARM rate from CMLS (commitment received few weeks back) vs. I have to compare with Scotia eHome 2.19% fixed rate (had locked it earlier on website). I am inclined towards taking variable one looking at the current conditions. Thought that I would go for converting it to fixed if the prime jumps after an 1.5 to 2 years. Does this make sense?
IMO you're overthinking it. P-1.25%, as of next week, will be a loan at 1.2% interest. Sign it immediately. Even if it has a bonafide sales clause (which it might) it doesn't matter. Your interest rate is 1.2%. On a real basis that rate is negative (by a lot). I'll bet you a barrel of WCS (which is slightly more expensive than a fancy Venti Starbucks drink) that prime won't be increasing back to 3.95% during the term of your mortgage. It took 2.5 years for prime to get from 2.5% to 3.95% from the bottom of the last oil price crash. Today the situation is worse (and not by a little bit). As for your other questions ... ask your broker. Yes the payment and interest rate should change. Yes the APR should change. Yes many variable rate deals are compounded monthly.
209Sr001 wrote: My wife and I are in the process of buying a new secondary property with the intention of renting both units. The offer was signed by both parties and the closing date is 17 Aug 2020. We dealt so far with a local mortgage broker who was referred by our realtor and got approved for a 5 year fixed mortgage at 3.09% with First National. I was expecting a better rate considering what I have seen other investors getting for their income properties lately.
Go talk to Tangerine. Their deals are available on rentals and start at 2.89% on a 5-year fixed. Don't pay a cent more than that (and yes, that's only held for 120 days so you have to wait a wee while).
Raikkonen wrote: On a variable rate mortgage, $2.3 MM Ontario home and $1.3 MM mortgage, are the front runners Desjardins P - 0.5%, Canada Life P - 0.39%, and Motusbank ? Any other deal on variable rate please?
That is correct, as far as I can see. You may want to throw in Tangerine on a HELOC at p-0.1% as well.
Nikola Alaica, CPA, CA | Tax, Accounting, Mortgages
Jr. Member
Sep 13, 2016
190 posts
160 upvotes
Can you please pm me best possible variable as well as 5 yr fixed rate for a mortgage refinance:

-How much is the mortgage owing? 255
-Roughly, what is the current market value of the property? 375
-Which city is the property located in? Winnipeg
-Is the property owner-occupied or rental? Owner occupied
-Who is your current lender? Canadian western bank
-Do you have a HELOC tied to the mortgage? Not right now but i would like to get heloc with refinancing if its possible
-Is the mortgage CMHC insured? No
-When did you buy the property? June 2018
-When is your renewal date? June 2020
Member
User avatar
Nov 26, 2014
347 posts
131 upvotes
Quebec
Good morning everyone,

I applied two weeks ago through my broker for Prime -0.9% variable with Desjardins.
My broker told me not to worry that he sent the application on time to lock in the rate but I havent heard anything since..
I worry that I won't get that deal, should I?
Do you guys think that if he says i'll be ok with that rate that i'll actually get it?

Thank you
Deal Fanatic
Dec 11, 2008
9959 posts
1470 upvotes
Mike15 wrote: I’d check out Tangerine. So far they’re still P-0.1 on HELOC, where most banks are P+0.5.

HELOC at 2.35%
I thought you had to have a mortgage with them in order to qualify for that rate?
Member
Jun 7, 2010
276 posts
63 upvotes
Skrish wrote: Request any mortgage expert for suggestions-
I had received a quote of Prime-1.25% variable ARM rate from CMLS (commitment received few weeks back) vs. I have to compare with Scotia eHome 2.19% fixed rate (had locked it earlier on website). I am inclined towards taking variable one looking at the current conditions. Thought that I would go for converting it to fixed if the prime jumps after an 1.5 to 2 years. Does this make sense?

Few queries that I have-
  • The calculation for monthly payment they have mentioned seems to be based on 3.45 Prime-1.25%. But the current prime is less on their website at 2.95% and CMLS still has to be announce drop to 2.45%. So, should I strike this and update the payment there? Or let it be there like that and Variable EMIs would anyways go down on its own anyways whether I do it or not?
  • Total cost of borrowing- It shows that we have to pay an XYZ amount based on 2.5% APR. But isn't APR in a variable rate mortgage supposed to be changing based on the interest rates? How can this be fixed?
  • In the commitment letter that I have to sign and share back, I see that it has compounding frequency- 'Monthly not in advance'. Because of monthly compounding instead of semi-annually, I see a increase of $4 per month in EMI which I found Ok. But what does it mean by 'not in advance'?
Thanks.
The ARM rate quote you have from CMLS is excellent. I was also with CMLS but their service and support left a ton to be desired for and I finally switched to THINK recently. However, they offered me P - 1% and if they had offered P - 1.25% I probably would have stayed with them too!

Just make sure, the offer has not expired (mine had a hard deadline to sign and renew).
Deal Fanatic
User avatar
Sep 13, 2011
5275 posts
2266 upvotes
Toronto
p0nk1n wrote: Good morning everyone,

I applied two weeks ago through my broker for Prime -0.9% variable with Desjardins.
My broker told me not to worry that he sent the application on time to lock in the rate but I havent heard anything since..
I worry that I won't get that deal, should I?
Do you guys think that if he says i'll be ok with that rate that i'll actually get it?

Thank you
No need for concern here. As long as your broker submitted the application to them in time, which he confirmed he has, then this this the rate you can expect. Desjardins was overwhelmed with applications since they were the only lender left with a deep discount on variable. I've been told that they are taking 10-15 business days to issue a commitment. This is excessive of course, but this is what can be expected when a lender has a promo on that destroys anyone else out there, which was the case here.

Hope this gives you a bit more reassurance. :)

Paul
Paul Meredith
Mortgage Broker, Author
CityCan Financial Corp (lic. 10532)
Member
User avatar
Nov 26, 2014
347 posts
131 upvotes
Quebec
PaulMeredith wrote: No need for concern here. As long as your broker submitted the application to them in time, which he confirmed he has, then this this the rate you can expect. Desjardins was overwhelmed with applications since they were the only lender left with a deep discount on variable. I've been told that they are taking 10-15 business days to issue a commitment. This is excessive of course, but this is what can be expected when a lender has a promo on that destroys anyone else out there, which was the case here.

Hope this gives you a bit more reassurance. :)

Paul
Thanks a lot Paul,

Yes it gives me more reassurance! I'll post back when I get the deal done to see if it's somewhere between 10-15 business days :)

Have a nice day
Member
Oct 17, 2013
251 posts
126 upvotes
Looking for 3 or 4 year variable
How much is the mortgage owing? 90,000
-Roughly, what is the current market value of the property? 375,000
-Which city is the property located in? Owen Sound
-Is the property owner-occupied or rental? Owner occupied
-Who is your current lender? Scotia bank
-Do you have a HELOC tied to the mortgage? Yes
-Is the mortgage CMHC insured? No
-When did you buy the property? October 1999
-When is your renewal date? July 15, 2020

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