News   Jul 17, 2024
Don Valley Floodway
 401     0 
News   Jul 16, 2024
Minto Submits Modifications to Grand Park Village Plan in Mimico
 873     2 
News   Jul 16, 2024
News Roundup for July 16, 2024
 657     0 

Are there certain banks with amazing incentives for mortgages?

Torontotony said:
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.
Click to expand...

Surely not AIG...
 
Torontotony said:
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.
Click to expand...

What's the best rate these days on Variable-Open ?
 
Best Open Variable I have is Prime + .75% (3.00%), but we don't push this product very hard unless our client has intentions of paying off the mortgage in full within the next 5 years.
 
Personally I would not put all my eggs in one basket, just like you would not keep only one investment in your portfolio, there is nothing that says you should only have one mortgage either. So I would rather split my mortgage. For instance you can get a short term "ie 1 year at %2.55 or a variable at prime" for half of your mortgage and a three to five year for the second half. This way you can take advantage of the rates right now while keeping safe against any sudden rate hikes. Also keep in mind that some times the five year is not necessarily the best rate you can get. I like the 3 year rates that are available right now, I have come across some at 3.69, at least you are not locked in for the whole five years with some thing like this.
 
Actually even in 5 yr fixed mortgage you have an option that's called Port-and-Blend which allows to transfer your mortgage (when you sell this home) to a new home. But for that you have to time the two transactions properly.

If a major bank is offering 3.75% on a 5/6 yr fixed, i personally think that it's worth it because the interest rates are likely to rise starting very soon(probably early spring) and one can save a significant amount over the term.
 
Kevin86 said:
If a major bank is offering 3.75% on a 5/6 yr fixed, i personally think that it's worth it because the interest rates are likely to rise starting very soon(probably early spring) and one can save a significant amount over the term.
Click to expand...
With variable at 2.25% now, (mortgages available at prime+0), then the prime rate would have to increase by more than 1.5% within a couple of years for the fixed to pay-off. It's very unusual for fixed to ever be a better deal ... though now might be the rare occasion ... but perhaps not after variable has dropped so much in the last few months ... prime+0.5 seemed the lowest anyone would go not so long ago.
 
yes it's unusual time...i don't think prime will be going back to 2.25 any time soon...not even for another 20 years to so

Astralia has already increased the rates, and there is a talk that canada could be next...so you never know how soon interest rates start jumping.
 
Kevin86 said:
yes it's unusual time...i don't think prime will be going back to 2.25 any time soon...not even for another 20 years to so

Astralia has already increased the rates, and there is a talk that canada could be next...so you never know how soon interest rates start jumping.
Click to expand...

If our loonie continues to rise against the greenback....and some experts say this time it may get to par and overtake it longer than a cup of coffee - interest rates may stay low for quite some time.
 
Mortgage rates are going up, the un-employment rate surprised the bond market and there was huge jump. RBC has already increased their rates. All other banks will probably follow on Tuesday. Whoever is looking to buy or renew, should get a rate hold ASAP.
 
There's only indication that fixed-rate mortgages are going up. Variable-rate mortagages are invariably a cheaper option, and as recently as Friday economists were saying they don't expect the Bank of Canada rate to change for another 6 months. with the rate only increasing to 2.5% in 2011. By that point mortgages should once again be available well below prime, and presumably the difference between prime and the Bank Rate will return to the traditional difference, resulting in a Bank Prime rate of 4.5% and variable mortgages readily available at 3.6% to 3.75%. This is still signifciantly less than the 5-year fixed-rate mortgages that were available last week.
 
Nfitz point well taken, but I can assure you a 5 year fixed rate at 3.64% is going to look mighty good in 12-18months time. ( Even compared to a variable)
 
Torontotony said:
Nfitz point well taken, but I can assure you a 5 year fixed rate at 3.64% is going to look mighty good in 12-18months time. ( Even compared to a variable)
Click to expand...
How can it, when you get the same for variable then!

While we here can discuss variable versus fixed, I would seriously question the ethics of anyone "in the business" suggesting people go for fixed-rate mortgages!!
 
Ethics aside, Prime rate is expected to move up to the 4-5% range within the next 18 months. There are no variable rate mortgages on the market today, that would be even be close to a mid-3% fixed rate at that time. Yes my clients would be paying a rate premium for the next 12 to 18 months, but they will be thanking me after that, as it will be a small price to pay in relation to the savings they incur when Prime spikes up.
 
You must log in or register to post here.

Back
Top