Real Estate

The Official Mortgage Rates Thread

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Sep 13, 2011
5309 posts
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Toronto
VladD973383 wrote: Paul could you please explain more about that "collateral charge" and how it impacts if later:
  1. I want to buy a new house and port my mortgage
  2. I want to buy a new house, pay my current mortgage and get a new one
  3. I find a better rate and switch the mortgage to a different lender
Will I have to pay any additional fees if I have a collateral charge?
Or does it only impact if I need to apply for the second mortgage / other credit?

Thanks in advance for your help!
For sure!

It does not affect your ability to port your mortgage, or pay it out before the end of the term. Nor does it add any additional cost to do so.

The only time it will could end up costing you additional money is when you go to switch lenders. Either at the end of the term, or in the middle of the term. When switching a standard charge mortgage, the legal and appraisal fee is normally paid for you by the new lender. With a collateral charge mortgage, the legal and appraisal fee apply. In some cases, some or even all of these fees can be paid for you, but it's often at a higher rate, which can be anywhere from 0.05% to 0.15% higher if you want all the fees covered. In most cases, it makes more sense to pay the fees and take the lower rate. Either way however, there is a cost to switching a collateral charge mortgage one way or another in most cases.

What i'm referring to above is just switching over your current balance, not refinancing. Refinancing meaning you are increasing your mortgage amount, and/or increasing your amortization. In this case, it doesn't matter if you have a collateral charge or not. The fees would apply. In some cases, these fees can still be covered for you.

Anytime you have a 2nd component such as a HELOC attached to your mortgage, then you have a collateral charge mortgage, regardless of the lender. This will be the case 100% of the time. Also, any new mortgage with TD, National Bank, or Tangerine will also be a collateral charge. It does not matter whether you have a HELOC attached to it or not.

It's also important to note that these additional charges when switching are 3rd party costs. They are not charges from the lender holding your mortgage, nor are they charges from the new lender. It's not uncommon for someone to walk into TD (for example), and be told that there are no additional fees to switch at the end of the term other than the discharge fee. In these cases, they are just referring to the fees charged by them. They generally will not tell you about the third party costs involved with switching a collateral mortgage.

Another drawback to having a collateral charge mortgage is that if you apply for any additional credit with your mortgage lender, then that too will get secured against your collateral charge mortgage. Loans, 'unsecured' lines of credit, credit cards, etc. Let's say you had a dispute with your bank on some credit card charges and refused to pay them until it was sorted out. The lender could then place you in default of your mortgage, since they have the credit card secured with the collateral mortgage. This is something that is EXTREMELY rare, but it's possible when you have a collateral mortgage. Just to be clear, this is ONLY for credit accounts you have with the same lender as you have your collateral mortgage with.

Another thing to be conscious of is the terminology used when talking to mortgage lenders. Many will ask their bank if they are getting a conventional mortgage, when they really want to know if their mortgage will be collateral or not. This is where it can get a little confusing. A conventional mortgage is a mortgage that has 20% or greater down payment or equity, and has nothing at all to do with the type of registration. You can walk into TD Bank (using them again as an example), and ask them if you are getting a conventional mortgage. If you have 20% downpayment, then they can tell you with confidence that your mortgage will be conventional. This is the truth. But what they may not tell you is that your conventional mortgage will also get registered as a collateral charge. In other words, your mortgage can be conventional and collateral at the same time. A better way of asking would be to simply ask if it's a collateral charge mortgage.

Hope you find this helpful. :)

Paul
Paul Meredith
Mortgage Broker, Author
CityCan Financial Corp (lic. 10532)
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Feb 2, 2014
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doodling wrote: Awesome info!

Wondering if HSBC's P-0.5 specifically for insured switches and purchases only? Am a banking client there.
Wow, it's the OP!!!!!!!!!!!!!!!!!

You're looking around 2.00% 5-year variable (Prime -.45%) with legals and appraisal fees covered.
Kevin Somnauth, CFA
Principal Broker - First Toronto Mortgage - MA (Ontario #13176, BC #X301007)
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Aug 5, 2017
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horiah00 wrote: It seems that a small renewal mortgage in Quebec can't get rates close to what is being posted in this thread? They seem to be worse than what I got back in 2010 when I bought the house or in 2015 at my first renewal.

-How much is the mortgage owing? 170k
-Roughly, what is the current market value of the property? 250k
-Which city is the property located in? Gatineau, Qc
-Is the property owner-occupied or a rental? Owner occupied
-Who is your current lender? MCAP
-Do you have a HELOC tied to the mortgage? No
-Is the mortgage CMHC insured? Well, I am a bit confused here. When I initially bough the house it was insured. Since then, I have paid a little bit over 20% of the original value of the house, so I am not sure if it is still considered as insured when I renew in June.
-When did you buy the property? 2010, term was 35 years.
-When is your renewal date? June 25.

Thank you.
for my small 120k$ i got 2.50% at scotia
Newbie
Nov 1, 2016
75 posts
12 upvotes
Am a first time buyer and am looking to purchase a house in North Etobicoke, Ontario in the next few months.

-What is the purchase price? $900,000
-How much is the down payment? 33.33% -- $300,000
-Where it the property located? North Etobicoke, ON
-When is the closing date? TBD
-Will the property be owner-occupied or a rental? Owner occupied.
Newbie
Dec 21, 2018
23 posts
2 upvotes
Does anyone on this forum recommend a specific broker for pre approval?

Thanks,
Member
Jul 3, 2007
253 posts
13 upvotes
Looking to renew my mortgage for my last 5 year term. I am looking for a broker as well so please pm me.

-How much is the mortgage owing? $82,159.41
-Roughly, what is the current market value of the property? 750,000
-Which city is the property located in? Toronto (scarborough)
-Is the property owner-occupied or a rental? owner occupied
-Who is your current lender? mcap
-Do you have a HELOC tied to the mortgage? no
-Is the mortgage CMHC insured? no
-When did you buy the property? aug 2010
-When is your renewal date? aug 28 2020
2012 Wins
3 wins for $38.42
Newbie
Apr 11, 2020
4 posts
Could you pls suggest what best rates can I get. I am a first-time buyer with credit score in very good range.

-What is the purchase price?
553 000$
-How much is the down payment?
5%,
-Where it the property located?
Mississauga, ON
-When is the closing date?
May Last Week
-Will the property be owner-occupied or a rental?
Owner-occupied

Also, suggest the rates that top 10 lenders can provide.

I am more inclined towards variable. Currently have an approved mortgage from 'National Bank' for prime-0.29.
Newbie
Feb 5, 2014
21 posts
7 upvotes
Toronto
Hey Everyone

I m looking for some guidance to my current situation, never had to deal with this issue before, always renewed via customer service online, never been to broker, just starting to learn that there are opsions and looking for some expert guidance, thank you for assistance, i have been reading posts on this forum and damm there are some great rates available, good on the individuals to negotiate those rates.

My mortgage is coming up for renewal 2nd renewal in 10 yrs, been with RBC since the beginning, won't mind staying with them but the rates are not attractive. I am also looking to get HELOC to invest in the business. RBC has a mortgage registered for HELOC for $420000 on the property value of about $450000 but would only allow a limit of 200k to be used. They want me to do an application to increase limit on my HELOC. its been painful to deal with them. I am stuck to go to another lender without switching for HELOC cause RBC has it registered for 420k but won't increase credit limit, i mean isn't my house collateral for them?

I have good HELOC rate at prime 2.45% and current mortgage at variable P-.70 to 1.75. now offering me posted 2.45 maybe p-10.

inquired with a broker and is scotia is offering Variable 2.45 and HELOC at 3.05, no charge to transfer but would register mortgage along with HELOC at 250k. Not thrilled with both offers. If I am going to do all the paperwork again and application don't mind switching and have access to at least 150k HELOC

-How much is the mortgage owing? ~141k
-Roughly, what is the current market value of the property? 460k
-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? RBC HOMELINE, currently using 33k out of 57. total limit on HELOC is up to 200k
-Is the mortgage CMHC insured? yes
-When did you buy the property? 2010
-When is your renewal date? May 28, 2020

Currently 5 year variable Prime -.7. Looking for HELOC access of about 150k. Thank you.
Newbie
Apr 24, 2007
5 posts
Toronto
Hi just wondering if someone could help me with my Mortgage Renewal:

-How much is the mortgage owing? $200,000
-Roughly, what is the current market value of the property? $1,100,000
-Which city is the property located in? Markham, Ontario
-Is the property owner-occupied or a rental? Owner
-Who is your current lender? CIBC
Do you have a HELOC tied to the mortgage? Yes CIBC $120k as a second charge loan - never used
-Is the mortgage CMHC insured? No
-When did you buy the property? Feb, 2016
-When is your renewal date? Jun 24, 2020

Spoke with CIBC and they say the HELOC and mortgage will require 2 discharge fees - wondering if any lenders would cover costs for both along with all transfer fees
Thanks for any input.
Banned
Sep 19, 2012
1253 posts
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Calgary
doodling wrote: -How much is the mortgage owing? ~450k
-Roughly, what is the current market value of the property? ~1.5m
-Which city is the property located in? Toronto
-Is the property owner-occupied or a rental? owner occupied
-Who is your current lender? Scotiabank
-Do you have a HELOC tied to the mortgage? Scotia Total Equity with STEP, $0 used ever
-Is the mortgage CMHC insured? no
-When did you buy the property? 2012
-When is your renewal date? May 31, 2020
Currently 5 year variable Prime -.7. Looking for conventional mortgage, variable or fixed. 
Welcome back OP! Rates can be had at 2.24% on a 5-year fixed and p-0.5% on a 5-year variable. All costs to switch covered (legal, appraisal and discharge). Both of the deals have fair early break penalties (3-months contract rate on the variable and "fair" IRD on the fixed). Neither have a bonafide sales clause.
doodling wrote: Would there be a cost associated since we're currently in a STEP (which has never been used)?
Nope. Virtually every lender allows a collateral charge switch (you've got a collateral charge with the STEP). Many lenders will do free collateral charge switches for borrowers, all the broker has to do is sacrifice some commission. For the rest of the lenders that don't allow it to be done for free, brokers will have generally have enough commission to reimburse the $780 FCT fee. So ... from the borrowers perspective there is no cost. Notable exception is if you've got a small mortgage ($150k or less); in that case you're probably paying for having a collateral charge because there just isn't enough commission in the deal for a broker to cover it.
doodling wrote: And as an aside, how are banks doing the home assessments during Covid? I imagine it's pretty weird considering social distancing and such. 
ModifIed appraisals are the norm these days and most lenders accept them. Lots of info here: https://www.aicanada.ca/covid-19-inform ... he-public/

TL;DR: video tours of the property and owner-taken pictures are common-place. Appraisers do a walk-around of your property as well.
VladD973383 wrote: Paul could you please explain more about that "collateral charge" and how it impacts if later:
  1. I want to buy a new house and port my mortgage
  2. I want to buy a new house, pay my current mortgage and get a new one
  3. I find a better rate and switch the mortgage to a different lender
Will I have to pay any additional fees if I have a collateral charge?
Or does it only impact if I need to apply for the second mortgage / other credit?
My name isn't Paul but I'll answer - if only because my son is named Vlad and I can't help myself (who am I kidding, I love talking about collateral charges!).

1. Porting your mortgage isn't impacted by a collateral charge.
2. Paying off a collateral charge is no different than paying off a standard charge.
3. Switching a collateral charge should be free (unless you've got a tiny mortgage - see above)

Here are some resources for understanding collateral charges in depth:
https://www.canada.ca/en/financial-cons ... .html#toc5.
https://cba.ca/information-on-mortgage-security

TL;DR: a collateral charge is like a "general security agreement" on your property. The lender generally takes your entire property value as security and uses it to secure all debts you have with that lender. This makes it easier to get additional secured debt (ie: a HELOC) as you don't need to register additional charges (for security/collateral) on your title.
Nikola Alaica, CPA, CA | Tax, Accounting, Mortgages
Newbie
Oct 2, 2017
10 posts
5 upvotes
Hi All,

I have a closing in a month and looking to get a full approval. I have been reaching out to brokers but I've gotten either no responses or what appears to be bad rates.

-What is the purchase price? 589K
-How much is the down payment? 20%
-Where it the property located? Brampton, Ontario
-When is the closing date? June 1st
-Will the property be owner-occupied or a rental? Owner Occupied, First time homebuyer

Looking for variable, fixed options at 25, 30 year amortization.
Member
User avatar
Sep 4, 2006
215 posts
5 upvotes
-What is the purchase price?
650k
-How much is the down payment?
20 percent
-Where it the property located?
Durham region
-When is the closing date?
30-60 days
-Will the property be owner-occupied or a rental?
Owner occupied
"The trouble is, if you don't risk anything, you risk even more."
Erica Jong
Deal Fanatic
Nov 24, 2013
6104 posts
2840 upvotes
Kingston, ON
horiah00 wrote: I assume 5 year variable?
There's been a lot of rate movement this week. Variable should be P-minus even at the banks.

My TD renewal offers online (which are always worse than what you can actually get) are down to 2.54% for 2YF so I fully believe 2.50% for ~a~ fixed term (not necessarily 5YF) is possible.
Member
Dec 3, 2012
202 posts
31 upvotes
Scarborough
Looking to renew my mortgage.

-How much is the mortgage owing? $511000
-Roughly, what is the current market value of the property? 900000
-Which city is the property located in? Toronto (scarborough)
-Is the property owner-occupied or a rental? Rental
-Who is your current lender? radius
-Do you have a HELOC tied to the mortgage? no
-Is the mortgage CMHC insured? no
-When did you buy the property? Jun 2015
-When is your renewal date? jun 2020

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