Fixed mortgage rates drop - From 1.78%

Jucius Maximus wrote: ↑ The use of "discount rates" together with IRD is what big banks use to take large amounts of your equity, if you refinance or sell before the fixed-rate mortgage term is over.
Here's an explanation of how it works (youtube): Exposing Big Bank Mortgage Prepayment Penalties

Paying an IRD for a fixed mortgage is a commonplace thing with any lender, but combined with the "discount rate," that's where you end up paying a lot.

A collateral mortgage is a different way of registering a mortgage, in which it enables the lender to more easily offer you other loan products, HELOC, etc., without having to take out another lein. It gets complicated when you want to refinance, because collateral mortgages require increased legal costs when you want to switch lenders. Also, with a collateral mortgage, it will be difficult if you want to get a HELOC from a different lender, since most of your equity is tied up in that collateral mortgage.

Collateral Mortgages and discount rates are different things, but they are both typical complications you could run into when dealing with big banks.

torwizard wrote: ↑ Who is offering 1.05% 5-year variable? Is it any of the big banks?
I have offer for 1.15% from Scotia, wondering if I can find any better rate...

JetSwift21 wrote: ↑ I also got 1.15 from
scotia variable primary uninsured and wondering if I should bite. I have until february.

djredhat wrote: ↑ Inflation’s through the roof, but we keep pumping cash and lowering the interest rates.

Makes perfect sense…

Azznflame wrote: ↑ Those are very good rates, I got my mortgage done last month. TD offered me a garbage 2.16% on a fixed 5 years and wouldn't budge. Just my experience from the beddington branch of TD.

flamez1000 wrote: ↑ Got 1.15% variable 30 year, uninsured from a BMO Broker on this forum.

Bluejay3 wrote: ↑ I renewed in March with bmo 5 year fixed at 1.49.

What I can't understand is why my penalty to cancel is so low (looking to move and might possibly need to break VS Port over)..the bmo guy said (in writing) it's around $2500 to break which seems so low for having 4 years left. But when I see this thread it sounds like it costs ppl way more to break their fixed mortgages. I read and re read through the contract and calculation and it sounds correct but I don't totally trust him and hearing everyone say it's really expensive worries me, how could it be so different?

djredhat wrote: ↑ It is low because the rate are going up, so you are most likely paying only 3 months of interest.

The IRD is to protect the lender from people breaking their contract to get lower rates if the rates go down. When rates go up, they would be actually more tan happy if you break your contract so that they lend these money to someone else at higher rate.

Think of it as the bank depositing their money in GIC.

anotherbargainhunter wrote: ↑ I got 1.4% 5 years variable 30 years amortization on $575 k, but I got 0.15% cash back from my broker upfront so technically I got 1.25% mortgage. Plus my bank gave me $1500 cash back.

Is this good deal?

donduck wrote: ↑ 5 year variable uninsured @ 1.15% @ 1mm 30 year amortization + $2,500 cash back.

Closed Sep 16 @ TD for rental property.

Require $50k cash/liquid investments at time of closing. No obligation to buy TD investment products after closing. 15% prepayment per calendar year.

PM for contact in GTA (non broker; TD mortgage specialist)