The Official Mortgage Rates Thread - Page 4800 - RedFlagDeals.com Forums (2024)

TheFreshYoungMikeyD wrote: ↑Good morning everyone, I’m looking for mortgage renewal rates on my primary residence. I’m on a 5 year fixed but I’m open whatever makes the most sense given the expected cuts.

Mortgage owing?
$275,000 (20 years left)

Current market value?
$820,000

Location?
Picton, ON

Owner-Occupied or Rental?
Owner-Occupied

Current lender?
Alterna

HELOC tied to the mortgage?
No

CMHC insured?
No

Purchase Date?
Mar. 2022 (Ported. Original Purchase date Jun 2019)

Purchase price?
$710,000

Renewal date?
Mid-June 2024

Thanks,
FYMD

Thanks for the post! The vast majority of people are choosing 3 year fixed rates due to the widespread expectation that rates should be lower at the end of the term than they are today. The lowest 3 year fixed is currently 5.19% or 5 year fixed at 4.89%. As you can see, the 5 year is a fair bit lower.

On a $275,000 mortgage, the difference between 5.19% and 4.79% over three years works out to roughly $2,500 (as you also have to take into consideration the ending balance). This means that you'll be behind by this amount at the end of three years by choosing the 3 year fixed.

The break even rate is 4.33%. This means that after 3 years, the 2 year fixed rate (to match the 5 year comparison term) would need to be lower than 4.33% to come out ahead with the higher, shorter-term rate.

It's kind of like making a $2,500 bet that the 2 year rate will be lower than 4.33% at the end of 3 years. If you were willing to take that bet then you can roll the dice on the 3 year rate. If not, then the 5 year term would be your best choice.

Hope this helps with your decision.

Paul

friedsoup wrote: ↑Hello, I'm currently shopping around for a pre-approval.

What is the purchase price?: 550-600k
How much is the down payment?: 20% (uninsured)
Where it the property located?: Montreal, Quebec
When is the closing date?: Likely end of year, but not sure yet.
Will the property be owner-occupied or a rental?: Owner Occupied
Credit Score: 770
Household Income: 165k single income
No debt.

I had a quick chat with my credit union and they offered 5.09% for 5 years fixed on 550k with 20% down and no insurance, but I did not try to haggle nor have I started calling other banks yet. I've never used a broker either, but if the rates are unfavorable, perhaps I'll look into that as well.

Preferably, I'd like 3 years fixed or 5 years fixed.

Thank you for your help!

Thanks for the post! If you're not looking until the end of the year, then I would hold off on starting this process until you're ready. The maximum rate hold on a preapproval is 120 days, which means that your new purchase will need to close within this window. Closing is the date that you take ownership of the property. In other words, the day you get your keys.

Rates are expected to be lower later in the year as well. This will result in a higher qualified amount.

Based on the information provided, you can expect to qualify for a mortgage of roughly $800,000. You would add your down payment on top of this for your maximum purchase price. This should give you a pretty good idea for now.

Shopping around for a rate at the preapproval stage is a waste of time, especially when you're not looking at buying right away. Not to mention, rates are expected to be lower by the time you do. Just keep in mind that anything can happen. Preapproval rates are generally a lot higher than the rates once you have an accepted offer in place. You're currently looking at a 3 year fixed rate in the range of 5.19% to 5.34% if you had an accepted offer in place today. On a 5 year, there is as low as 4.94%. Preapproval rates will be substantially higher than this.

Hope you find this helpful!

Paul

morden wrote: ↑Hello,

Our mortgage with MCAP is up for renewal mid-June. We're actually looking at selling and moving into a bigger house this summer/fall, if we find something we like. Should we be looking at specific products at renewal time that would minimize any penalties should we decide to move in the next 6 months?

-How much is the mortgage owing? 100k
-Roughly, what is the current market value of the property? 800k
-Which city is the property located in? Montreal
-Is the property owner-occupied or a rental? Owner-occupied
-Who is your current lender? MACP
-Do you have a HELOC tied to the mortgage? no
-Is the mortgage CMHC insured? no
-When did you buy the property? 2009
-What was the purchase price? 325k
-When is your renewal date? june 20

Thanks!

Thanks for the post! It can be tough to know exactly what to do when you're looking at purchasing a new property so soon after your renewal date. You're best bet will likely be to go with a HELOC rather than a traditional mortgage. A HELOC is a Home Equity Line of Credit. The rate a HELOC is high by comparison, prime +0.20% to prime +0.50% (currently 7.40% to 7.70%). But it's a fully open loan meaning you can pay it out and close it at any time without penalty. This will give you maximum flexibility. You can even request a higher limit and use it to fund the deposit for the new purchase if needed. You'll likely be looking around 600 to $1000 to get it set up. I'm not sure if Simplii Financial deals in Quebec, but if they do, you may want to reach out to them directly. Their set up fees on a HELOC are only around $150 (you can confirm this with them).

If you went with a 5 year fixed with the intention of breaking it, the regular rate with MCAP right now is 5.24%. If you can get by with a 3 months interest penalty, then you'd be looking at a penalty of roughly $1,300. Higher than the cost of setting up the HELOC. If rates were to drop substantially by the time you break your mortgage, then you could be looking at a much steeper penalty, which would add to your risk.

We also need to take into consideration the difference in interest. When comparing 5.24% with 7.70%, the interest difference is roughly $200 per month.

You can likely negotiate the fixed rate with MCAP down a bit lower. It will not make sense to move to a different lender given that your balance is only $100,000. It can be harder to access the lower rates with smaller balances. Small rate differences will not have as much impact on a smaller balance either. A 0.05% difference in rate would result in a payment difference of only $2.41 per month (10 year amortization). The remaining amortization will not have a huge impact, but worth mentioning given that we're talking such small numbers. A 25 year amortization would be a difference of $2.87 more month.

That gives you a couple of options to think about. Hope you find this helpful.

Paul

Hello,

I am looking for 3-year fixed and 5-year variable rate expectations for a purchase of a property with the details below. Also wondering how the rates vary between the big 5 banks and the alternatives to the big 5 banks.

-What is the purchase price? $1.6M
-How much is the down payment? 20%
-Where it the property located? Mississauga
-When is the closing date? May 31
-Will the property be owner-occupied or a rental? Owner

Thank you!

Noviverde wrote: ↑Hello,

I am looking for 3-year fixed and 5-year variable rate expectations for a purchase of a property with the details below. Also wondering how the rates vary between the big 5 banks and the alternatives to the big 5 banks.

-What is the purchase price? $1.6M
-How much is the down payment? 20%
-Where it the property located? Mississauga
-When is the closing date? May 31
-Will the property be owner-occupied or a rental? Owner

Thank you!

Thanks for the info. At the moment the best rates we are seeing for uninsurable mortgages (purchases over $1 million) would all be with major banks. You’d be looking at the following:
- 5.19-5.34% 3 year fixed
- Prime - 0.95-1.10% 5 year variable with $4100 cashback

These are available for a full featured mortgage and come with upto 15% prepayment privileges.

Given your closing date is a little over a month away, if rates do drop prior to your closing then you can still take advantage of the lower rates as your broker can “float down” your rate to what is available at the time. This can be done as long as you are about a week out from closing.

TazZaide wrote: ↑Thanks for the info. At the moment the best rates we are seeing for uninsurable mortgages (purchases over $1 million) would all be with major banks. You’d be looking at the following:
- 5.19-5.34% 3 year fixed
- Prime - 0.95-1.10% 5 year variable with $4100 cashback

These are available for a full featured mortgage and come with upto 15% prepayment privileges.

Given your closing date is a little over a month away, if rates do drop prior to your closing then you can still take advantage of the lower rates as your broker can “float down” your rate to what is available at the time. This can be done as long as you are about a week out from closing.

Thanks for quick response. What determines the final number in the quoted range? Credit score or income? And is cashback only on the variable option?

Noviverde wrote: ↑Thanks for quick response. What determines the final number in the quoted range? Credit score or income? And is cashback only on the variable option?

3 biggest factors:

-Market conditions at the time the Pricing Dept reviews the file (and market conditions can change daily).
-Size of the mortgage
-Closing date (length of the rate hold period)

Noviverde wrote: ↑Hello,

I am looking for 3-year fixed and 5-year variable rate expectations for a purchase of a property with the details below. Also wondering how the rates vary between the big 5 banks and the alternatives to the big 5 banks.

-What is the purchase price? $1.6M
-How much is the down payment? 20%
-Where it the property located? Mississauga
-When is the closing date? May 31
-Will the property be owner-occupied or a rental? Owner

Thank you!

Thanks for the post! The lowest 3 year fixed rate is currently 5.24% through one of the big banks. No pricing exception required. It's possible that we may be able to get it down to 5.19%. Maximum amortization is 25 years.
For 5 year variable, you're in the range of prime -1.10% to prime -0.95% (currently 6.10% to 6.25%) + $4,100 cash back.

Note that these are the rates available as of today. There is currently significant upward pressure on fixed rates and they can change at any time without notice. Rates cannot be locked until we have the full application / document package from you and we've confirmed that your application has been submitted to the lender for approval.

Anyone with a purchase closing within 120 days or a renewal coming up within the next 120 days should get a rate locked in ASAP. If rates drop before your closing then we can get your rate dropped to the lower rate. But if they rise and you do not have a rate locked then you'll have no choice but to accept the higher rate.

Paul

PaulMeredith wrote: ↑Thanks for the post! It can be tough to know exactly what to do when you're looking at purchasing a new property so soon after your renewal date. You're best bet will likely be to go with a HELOC rather than a traditional mortgage. A HELOC is a Home Equity Line of Credit. The rate a HELOC is high by comparison, prime +0.20% to prime +0.50% (currently 7.40% to 7.70%). But it's a fully open loan meaning you can pay it out and close it at any time without penalty. This will give you maximum flexibility. You can even request a higher limit and use it to fund the deposit for the new purchase if needed. You'll likely be looking around 600 to $1000 to get it set up. I'm not sure if Simplii Financial deals in Quebec, but if they do, you may want to reach out to them directly. Their set up fees on a HELOC are only around $150 (you can confirm this with them).

If you went with a 5 year fixed with the intention of breaking it, the regular rate with MCAP right now is 5.24%. If you can get by with a 3 months interest penalty, then you'd be looking at a penalty of roughly $1,300. Higher than the cost of setting up the HELOC. If rates were to drop substantially by the time you break your mortgage, then you could be looking at a much steeper penalty, which would add to your risk.

We also need to take into consideration the difference in interest. When comparing 5.24% with 7.70%, the interest difference is roughly $200 per month.

You can likely negotiate the fixed rate with MCAP down a bit lower. It will not make sense to move to a different lender given that your balance is only $100,000. It can be harder to access the lower rates with smaller balances. Small rate differences will not have as much impact on a smaller balance either. A 0.05% difference in rate would result in a payment difference of only $2.41 per month (10 year amortization). The remaining amortization will not have a huge impact, but worth mentioning given that we're talking such small numbers. A 25 year amortization would be a difference of $2.87 more month.

That gives you a couple of options to think about. Hope you find this helpful.

Paul

Paul, that was super informative, thanks! Glad I reached out in the thread and learned something.

Would the equation change if we did a large prepayment on the mortgage (our allowance is 29K) or pay off a more substantial amount at renewal? We could muster maybe 50K to pay off half the remaining balance.

OR would it make more sense to keep this cash to add to the down payment on a new property?

For the HELOC, it doesn't appear Simplii offers service in QC . Any suggested alternatives?

morden wrote: ↑Paul, that was super informative, thanks! Glad I reached out in the thread and learned something.

Would the equation change if we did a large prepayment on the mortgage (our allowance is 29K) or pay off a more substantial amount at renewal? We could muster maybe 50K to pay off half the remaining balance.

OR would it make more sense to keep this cash to add to the down payment on a new property?

For the HELOC, it doesn't appear Simplii offers service in QC . Any suggested alternatives?

My pleasure, glad I could help!

As the down payment can come from the sale of the property, then you wouldn't need to hold it back for the down payment, providing you have enough funds for the deposit. If so, I would make the prepayment right away. As soon as it's applied, you'll no longer pay interest on that amount, starting with the very next payment. That will save you a bit more.

Thanks for sharing the info on Simplii not offering service in Quebec. Not surprising actually. MCAP offers HELOCs, so you can speak with. You could also speak to your bank about it as well. Your bank may actually be able to do a better rate on the HELOC then what MCAP will offer (prime +0.50%).

Hope this is helpful.

Paul

jaytcfc wrote: ↑Hi Paul. I may be interested in this. What bank is the 5.24%

We can't post the names of the lenders publicly unfortunately. This is because we post promotional rates that are not available through the majority of brokers, or rates that may not be offered through the lenders directly. Happy to share the info with you privately once we've started the process. Note the 5.24% is not available for every situation, but the rate will generally range from 5.19% to 5.29%, depending primarily on your closing date.

PaulMeredith wrote: ↑When converting a variable rate into a fixed, you have no negotiating power unfortunately. The bank knows that you have no other options without paying a penalty.

That being said, are you sure you want to lock into a fixed right now? We're getting closer and closer to the projected rate cuts from the Bank of Canada. Despite the recent increases to fixed rates over the past week, economists are still widely forecasting that we'll see the first cut on June 5th. Three of the big six banks are currently forecasting this. The other three are expecting the cuts to start in the Q3. This doesn't mean that it will happen, and I personally wouldn't be surprised if the rate remain unchanged on June 5th. But time will tell of course. Either way, we're getting closer to the projected cuts.

The big six banks are all forecasting cuts from 0.75% to 1.00% by the end of this year. The are expecting the cuts to continue into 2025, ranging from 1.00% to as much as 1.75%. These of course will continue to be adjusted. Just keep in mind that what's expected to happen doesn't always materialize. Anything can happen.

You're also with BMO who uses true variable rate mortgages, meaning the payment will remain the same for the entire term. If the rate changes, then the portion of the payment that gets applied to principal vs. interest is what changes. If the rate increases, then less is applied to principal and more to interest. If it decreases, then it's the opposite. As the fixed rates are substantially higher than the variable rate when your mortgage started, making the move will result in a large payment increase to restore the amortization to a typical schedule.

You've made this far on the variable rate. It may be worth waiting a bit longer to see what happens with rates. It would be a same to lock in right now, only to watch the prime rate start to drop right after you make the move.

Keep in mind that everyone is a bit different. They each have their own goals, financial beliefs and tolerance for risk. What's right for one person may not be right for the next. You need to do what you think is best for you. As I say in my book, the right choice isn't always the one that saves you the most money. It's the one that lets you sleep soundly at night.

Hope you find this helpful.

Paul

thanks Paul, for this detailed reply.
Yeah I thought that I have already survived the toughest time, it is probably light at the end of tunnel from now.
I think I just wanted to understand how others are locking it in, my first time.
And looked like it is what I thought

Thanks again!

BradyC882 wrote: ↑thanks Paul, for this detailed reply.
Yeah I thought that I have already survived the toughest time, it is probably light at the end of tunnel from now.
I think I just wanted to understand how others are locking it in, my first time.
And looked like it is what I thought

Thanks again!

My pleasure! Always happy to help and advise.

Paul

Hi All,

For an uninsured mortgage, is fixed rate of 4.99% for 3 years a good rate?

Currently at 5.97% variable and have the option to continue with that or go with 4.99% fixed for 3 years.

Any suggestions?

rohan1985 wrote: ↑Hi All,

For an uninsured mortgage, is fixed rate of 4.99% for 3 years a good rate?

Currently at 5.97% variable and have the option to continue with that or go with 4.99% fixed for 3 years.

Any suggestions?

Thanks for the post, and great question! Yes, 4.99% 3 year fixed for an uninsured mortgage is an excellent rate! Definitely better than anything else out there right now. Is this being offered to you by your current lender? Or from another lender?
How much do you owe on your mortgage now and when is your renewal date? I can much better advise you once I have this information. If you could also please let me know the name of the lender you're with now and I'll then further advise.

Paul

PaulMeredith wrote: ↑Thanks for the post, and great question! Yes, 4.99% 3 year fixed for an uninsured mortgage is an excellent rate! Definitely better than anything else out there right now. Is this being offered to you by your current lender? Or from another lender?
How much do you owe on your mortgage now and when is your renewal date? I can much better advise you once I have this information. If you could also please let me know the name of the lender you're with now and I'll then further advise.

Paul

DM sent

rohan1985 wrote: ↑Hi All,

For an uninsured mortgage, is fixed rate of 4.99% for 3 years a good rate?

Currently at 5.97% variable and have the option to continue with that or go with 4.99% fixed for 3 years.

Any suggestions?

In today's time, 4.99% for 3-year fixed is very good rate. Are you looking to improve your cashflow by switching to fixed rate? All large banks are expecting rate cuts in the near future, but nobody knows that for sure.

thanks,
Gaurav

Looking to renew a mortgage, interested in rates:

How much is the mortgage owing? 137k
-Roughly, what is the current market value of the property? 190-200k
-Which city is the property located in? Edmonton, AB
-Is the property owner-occupied or a rental? Family occupied, no rent.
-Who is your current lender? MCAP
-Do you have a HELOC tied to the mortgage? No
-Is the mortgage CMHC insured? Yes
-When did you buy the property? 2021
-What was the purchase price? 205
-When is your renewal date? June 17 2024

Looking for 3/5 year fixed and 5 year variable rates. Thanks.