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[Royal Bank] RBC new 3-4-5 year mortgage rates

  • Last Updated:
  • Oct 25th, 2020 10:48 pm
Sr. Member
Jun 10, 2017
643 posts
843 upvotes
Frost2020 wrote: The RBC internal calculator uses so called "Remaining Term Market Rate". Before last week it was 2.05%, now it's 1.9%. At least, this is what I've got from the RBC mortgage rep when he did the penalty estimate for me
Thanks that makes sense, since she said she's using the banks system to do the calculation and she's inputing the exact values I'm entering. Matter of fact, she tried the exact same values on the calculator from the site that I used and she got the same results as me, that's why she said the calculator is totally wrong.
That was disappointing, as I was happy to save some money on it, but it's a second mortgage that's low balance so I'm not losing out too much.
Newbie
May 23, 2020
12 posts
8 upvotes
GenericMember wrote: Thanks that makes sense, since she said she's using the banks system to do the calculation and she's inputing the exact values I'm entering. Matter of fact, she tried the exact same values on the calculator from the site that I used and she got the same results as me, that's why she said the calculator is totally wrong.
That was disappointing, as I was happy to save some money on it, but it's a second mortgage that's low balance so I'm not losing out too much.
I personally just renewed earlier with a big penalty but it still made sense to me if my calculations are correct :)
Sr. Member
Jun 10, 2017
643 posts
843 upvotes
Frost2020 wrote: I personally just renewed earlier with a big penalty but it still made sense to me if my calculations are correct :)
I renewed in February this year at 2.89 which was good at the time.. Didn't think the rates would drop this much.
Jr. Member
Aug 26, 2017
123 posts
55 upvotes
Are you guys calling a specific mortgage rep or just using a general RBC number when calling to inquire about refinancing?
Newbie
May 23, 2020
12 posts
8 upvotes
GenericMember wrote: I renewed in February this year at 2.89 which was good at the time.. Didn't think the rates would drop this much.
I know... Mine was 3.29% fixed, signed in June 2018
Sr. Member
User avatar
Aug 29, 2018
731 posts
742 upvotes
GenericMember wrote: I renewed in February this year at 2.89 which was good at the time.. Didn't think the rates would drop this much.
Just renewed for 2 final years @ 2.36%. Before renewal I was on 3.24% so good enough. Could of saved more beer money but yolo.....2 more years and done!!!!!!!!!!

Anyone know what happens if I finish my payments before the 2nd year happens? For example, I'm allowed 10% annual payment and every month I'm allowed a double payment. If I do this, I'll finish mortgage in the 1st year.
Newbie
Apr 4, 2013
55 posts
5 upvotes
Frost2020 wrote: I know... Mine was 3.29% fixed, signed in June 2018
don't feel bad mine was 3.54% fixed, signed in August 2018. I always have done variable closed except in 2018 when i signed a 5 year fixed. My rental has 240K left and maturity in 2023. My primary has 77K left and will be finished in 2023 :)
Member
Nov 14, 2012
373 posts
107 upvotes
CALGARY
with TD signed new mortgage(350k) 2.76% 5yr fixed feb2020, feeling little left out :( with rates dropping.
rental property left open 4.5% thinking might sell(won't anymore coz of low prices), 110K left on it.
Any suggestions how do i go about if I these low ratescan hlep me.
thanking in Advance.
Sr. Member
User avatar
Mar 20, 2013
632 posts
680 upvotes
Winnipeg
willy0275 wrote: I find it really odd that some of you are contemplating variable @ 1.75% or higher when you can get fixed @ 1.94%. Yes rates will "stay low" but only one increase will make that rate more expensive, which make variable rates quite unattractive at the moment. That being said, if you think the odds of breaking your mortgage are high, variable makes sense.
I’ve had a mortgage for almost 20 years now. I’ve always gone fixed, mostly because I’ve always be worried about interest rates spiking.

But it’s never happened and I would have saved tens of thousands if I had always gone variable.

I’ll probably always stay fixed though because I’m a Nervous Nelly who prefers to know what my payments are going to be. But don’t expect to ever save money by going with a fixed rate. It could happen, but probably won’t.
Deal Addict
Mar 26, 2006
2053 posts
199 upvotes
OTTAWA, Canada
I’m jealous of these rates, have 3 years left at 3.29 before renewal.

Decided to do a big pre-payment to get the interest down so I could stop being so depressed LOL.
Deal Addict
Aug 5, 2015
2072 posts
1361 upvotes
Montreal, QC
CheapWinnipeger wrote: I’ve had a mortgage for almost 20 years now. I’ve always gone fixed, mostly because I’ve always be worried about interest rates spiking.

But it’s never happened and I would have saved tens of thousands if I had always gone variable.

I’ll probably always stay fixed though because I’m a Nervous Nelly who prefers to know what my payments are going to be. But don’t expect to ever save money by going with a fixed rate. It could happen, but probably won’t.
Statistically you're right, but right now Canada can't lower the target rate from 0.25%, so the only way variable can go lower is through discounts. If you could currently get a variable at least 0.50% lower than the best fixed rate I'd definitely go variable.
Happy Koodo Public Mobile customer :-)
Deal Fanatic
Dec 16, 2005
5261 posts
3277 upvotes
demanche wrote: I’m jealous of these rates, have 3 years left at 3.29 before renewal.

Decided to do a big pre-payment to get the interest down so I could stop being so depressed LOL.
I just got offered 1.95% from BMO for renewing early on my 3.19% mortgage with 3 years left. Penalty was only $1200. rolled it into the mortgage and now my payment is $50 less biweekly. So basically extended 2 additional years to save about $2700.

Having said that I have a second mortgage at 2.79% with around 3 years remaining and the penalty was $3300. I didn't renew this one.

So you should check what the penalty is and see if it makes sense to renew for a lower rate. My first mortgage was only 3 months interest to renew while the other one was IRD.
Newbie
Apr 14, 2020
6 posts
i don't understand those of you complaining abt being stuck with mortgage at high rate. Ask your bank about the penalty and do your calculation. You DO NOT need to fulfill the term. You will have to pay the penalty but if the number works out better for you there is no reason to stay.

Personally, i have a 700k mortgage at 2.64% (5yr fixed, hsbc) signed in Feb this year. The penalty is about 6k so its huge, but with this low COVID rates, it makes perfect finance sense to pay the penalty and renew. I will be ahead by minimum 10~15k even after penalty depending on the new renewal rate.
Member
User avatar
Mar 23, 2017
378 posts
254 upvotes
Canada
IkarisK87514 wrote: i don't understand those of you complaining abt being stuck with mortgage at high rate. Ask your bank about the penalty and do your calculation. You DO NOT need to fulfill the term. You will have to pay the penalty but if the number works out better for you there is no reason to stay.

Personally, i have a 700k mortgage at 2.64% (5yr fixed, hsbc) signed in Feb this year. The penalty is about 6k so its huge, but with this low COVID rates, it makes perfect finance sense to pay the penalty and renew. I will be ahead by minimum 10~15k even after penalty depending on the new renewal rate.
Exactly. Penalty for me is 6600 but i will be saving 16k if I go with new rate. it will save me 10k net.
Member
Feb 13, 2009
489 posts
157 upvotes
Ontario
IkarisK87514 wrote: i don't understand those of you complaining abt being stuck with mortgage at high rate. Ask your bank about the penalty and do your calculation. You DO NOT need to fulfill the term. You will have to pay the penalty but if the number works out better for you there is no reason to stay.

Personally, i have a 700k mortgage at 2.64% (5yr fixed, hsbc) signed in Feb this year. The penalty is about 6k so its huge, but with this low COVID rates, it makes perfect finance sense to pay the penalty and renew. I will be ahead by minimum 10~15k even after penalty depending on the new renewal rate.
Same here with my situation after working through the numbers. $11,000 penalty fee but will be saving 23,000 over the five year term, so a net savings of 12,000 split across 5 years - pretty good and worthwhile if you ask me.

Now maybe it would be a more difficult decision for people who do not have the few thousand dollars readily available to pay the penalty fee, is my guess as to why some people are not able/willing to go through with paying the prepayment penalty?

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