Are there certain banks with amazing incentives for mortgages?

[Smileycelia]

I heard some banks give cashback up to 5% on getting your mortgage with them. Which ones and is it worth it? It's not advertised on their websites, so do you just go in and ask for it? Any help would be greatly appreciated! Thanks.

 

[Skibadee]

I think MCAP does , but they give you a crappy rate

 

[ABuyer]

Almost all banks offer a free down payment program, but since the government has made it illegal to do 100% Mortgage, now banks offer to pay you or make your down payment of 5% on your behalf. Of course that comes at a price. Most banks only offer 5 Year posted mortgage at that rate, such as the FI I work for. If you can muster 5% down payment then getting a 5 year around %4.00 should not be a problem, but if you want us to pay your 5% down payment the best we can do is %5.49. It is still not too hard to come up with 5% down payment if you don't have savings. We can arrange for you to have a RSP catchup line at 3.25% and put the money in your RSP, then after 90 days you take it out under home buyers and put it as down payment. As long as you have not owned a house in the last five years this is doable. Of course all of this would still be based on your income.

 

[Observer Walt]

You should probably talk to a mortgage broker. Assuming you have reasonably good credit, they will shop the market for you, including lenders who you have probably never heard of.

 

[Therion]

A lot fewer incentives now than a few months ago. The real estate rebound has been nothing short of amazing. I can attest to that personally, in that every house we looked at to buy sold for approx. $50,000 over asking. With a hot market like this, banks don't need to put out incentives on mortgages. The low interest rate is the biggest incentive.

 

[nfitz]

Hmm, variable rate mortgages are coming down ... Ing Direct is now offering Prime+0.1% ... so one should be able to push to Prime now at the major banks (Royal is advertising Prime+0.3%). Still not as good as the Prime-0.75% they were offering 18-months ago ... (which could be pushed to Prime-0.9%) ... but starting to get more reasonable!

 

[Kevin86]

Today I noticed on BMO's website that they are offering Prime (2.25%) for 5 yr closed variable. As of today I think this is best rate as far as major banks are concerned. Although I have this feeling that other banks will come forward and match this rate soon.

 

[ducati0000]

never accept a bank "best rate",so many times I heard mortgage brokers can definitely provide a better rate.I was talking to a branch mortgage adviser at TD and she kept promising the best rate she can get,well her best rate is %.50 higher than a rate my mortgage broker got me at the same institution in two day search.When I told her she says she match it...well I guess her best rate wasnt a best rate.

 

[Kevin86]

I haven't had any experience with any mortgage broker yet, so not sure they work, but from what I have heard, you are right one can almost always get a better rate from a broker.

If the broker gets you a rate from any of the five major banks then i assume it's a better option but if they take you to one of the smaller banks or credit unions who don't have many offices and it will limit your flexibility. I have heard that smaller institutions usually have certain strings attached e.g. No prepayment allowed or other hidden charges.

Having said that...I am actually looking for a mortgage myself and have explored all of the major banks. I still haven't tried any broker because don't know who to go to. The best fixed rate that I have so far (from a major bank) is 3.75 on 6 yr closed.

 

[Torontotony]

Hi folks, please excuse the gratuitous self-promotion.

I am currently providing my clients the following terms and rates:

5 year w/5% cashback (100% financing) - 5.40%
5 year fixed rate (no cashback) - 3.74%
Variable rates @ Prime.

Most banks offer 100% financing through their "cashback" mortgages. Their rates are typically between 5.50 and 5.80%. IMHO these offers, while much more expensive than a current "best rate" 5 year fixed, will still provide decent value in the long term.

 

[Kevin86]

Hi folks, please excuse the gratuitous self-promotion.

I am currently providing my clients the following terms and rates:

5 year w/5% cashback (100% financing) - 5.40%
5 year fixed rate (no cashback) - 3.74%
Variable rates @ Prime.

Most banks offer 100% financing through their "cashback" mortgages. Their rates are typically between 5.50 and 5.80%. IMHO these offers, while much more expensive than a current "best rate" 5 year fixed, will still provide decent value in the long term.

If I have 10% downpayment but still like to get 5% cash back. In this case what will my interest be? I was just curious as in this case it will not be 100% financing as you indicated above.

 

[Torontotony]

Hey Kevin,

The interest rate is the same regardless of downpayment amount, however the insurance premium on the mortgage will decrease to 2.40% (with a 35 year amortization). Further, if you purchase a home that qualifies under CMHC's Green Home Program you automatically receive a further reduction of 0.40% on the insurance premium and an additional 10% discount on the premium amount.

 

[nfitz]

What is this insurance premium? All I pay is the variable mortgage ... with a portion paying the 1.35% interest (prime minus 0.9%) and the rest paying prinicipal.

 

[Torontotony]

What is this insurance premium? All I pay is the variable mortgage ... with a portion paying the 1.35% interest (prime minus 0.9%) and the rest paying prinicipal.

Nfitz, all mortgages which are greater than 80% of the purchase price or appraised value of a property, are required by law to be insured through a mortgage default insurer, like CMHC, GENWORTH, and AIG or a lender must self insure against default. This insurance premium is usually capitalized into the mortgage principal. These mortgages are typicaly referred to as "High ratio" . There should never be a difference in interest rate solely based on the amount of downpayment a borrower is putting into a purchase. BTW you have a very good rate on your variable.

 

[nfitz]

Nfitz, all mortgages which are greater than 80% of the purchase price or appraised value of a property, are required by law to be insured through a mortgage default insurer, like CMHC, GENWORTH, and AIG or a lender must self insure against default.

Ahh! This is for mortgages where one doesn't put enough down ... you had commented that the rate wasn't connected to the size of the down payment ... and I guess you mean that if you have triggered the need for insurance, then it isn't connected.

Yes, great rate! But pretty prime minus 0.9 common if you got a variable mortgate before mid-2007 or so ... banks were advertising as low as prime minus 0.8 to anyone who walked off the street, and I think a few may have had as low as prime minus 1.0, though pehaps not in 2006 or 2007.