Re: Mortgage rates
 

Essentially yes. The banks have what they call posted rates (what they post on their websites and in branch). This is a bit like the sticker price on a car lot. The dealer tries to sell as close to the sticker price as possible and it is up to you to negotiate whatever you can off it.

The riskier you are as a borrower the less negotiating room you have. The CMHC insurance goes a long way to mitigate the bank's risk but they would still rather lend to people who will pay the mortgage, rather than leave them to sort out a default, so they will take your credit score into account.

Look at ING Direct and President's Choice financial, and also check your local credit union, to see what rates they are offering. This should be your target for negotiating with the bank.

Re: Mortgage rates
 

We are in same boat as G77, wanting to buy, 5% deposit only, reasonable credit scoring, not borrowing up to our ceiling etc. Going to bank on tuesday, but ING and PC appear to offer 2.20 or 2.25 variable including options to pay lumps off as desired; at first glance HSBC will offer us nowhere near this as we are not premier customers. I will try negotiating with bank and let you know how we get on, if not we will try broker or ING or PC

Re: Mortgage rates
 

Be interested to know what the outcome is.... I have been putting off applying for a mortgage for weeks now.

Presumably ING etc will alter their rates according to risk also?

Re: Mortgage rates
 

With a limited downpayment you are required to have CMHC backed insurance, and the premium is a sliding % of the borrowed amount, which will be tacked onto the amount you are borrowing to buy the property. Less downpayment = more compulsory insurance premium added.


If you have a poor credit rating I suspect that the low risk low interest lenders will just decline to lend to you.

Re: Mortgage rates
 

I don't think it's been mentioned so far but, as an added dimension, CMHC or one of the other possible insurers, can/may decline to insure the mortgage, at which point the borrower is sweet out of luck.

Re: Mortgage rates
 

I was aware of the insurance added on top - was just curious if they hit you with this AND worse interest rates, seems the answer is yes.

Wasn't aware of this - presume they don't disclose the rules though?

Re: Mortgage rates
 

It could be a number of reasons but usually the credibility of the borrowers and occasionally the property being mortgaged. If you have good/decent credit and it's a good property the likelihood is you'll receive the insurance.

Re: Mortgage rates
 

Fixed vs Variable Rates

For those interested here's an article from today's Toronto Star.

http://www.moneyville.ca/article/967...age-what-to-do

Re: Mortgage rates
 

I have a 3.75% fixed for 5yrs. Not brave enough to take the variable risk

Re: Mortgage rates
 

If I were renewing today, I'd take that deal in a heartbeat.;)

Re: Mortgage rates
 

The wrong coast for you, but Coast Capital Credit Union are currently offering 3.65% for a five year fixed term.

Re: Mortgage rates
 

I suspect similar deals might be had with credit unions on the other coast. I'm tied into my current prime-0.82% deal til 2013 so I'll ride the rollercoaster of interest rates for now.;)

Re: Mortgage rates
 

I'd be quite happy with that for now. I know my variable rate does allow me to switch free to a fixed rate as long as the term is longer. I think this is fairly common.

Re: Mortgage rates
 

Any thoughts on HSBC Smart Saver (or similar) mortgages where you link savings to your mortgage instead of making a larger downpayment?

Re: Mortgage rates
 

That is pretty good - the mortgage advisors I deal with (who generally have great rates) are offering 3.84% for 5 year fixed.

Re: Mortgage rates
 

Not totally, there are Private Lenders who will consider those not normally qualifying for mortgages, you may pay a slightly higher interest rate and an arrangement fee, but its possible as a short term thing until you build your credit up again, then you can refinance back into the "normal" stream.

Re: Mortgage rates
 

Manulife One seems quite good where if you combine your savings and chequing with your mortgage account. As long as you don't overspend that is:

http://www2.manulifeone.ca/about-manulife-one/

Re: Mortgage rates
 

Just to update as I promised we would ages ago.

We are putting 5% down and today and going through a broker it looks like we will get prime-0.85 variable rate, 5 year closed with flexible payment options to overpay etc. Mortgage is with CIBC but this is a way better rate than they have on their website. We are not borrowing anyway near our max

Re: Mortgage rates
 

What was your experience with HSBC?

Re: Mortgage rates
 

http://forums.redflagdeals.com/warni...ers-647071/46/

This thread is worth a read. Don't plow through all the 46 pages - but there are some interesting comments at the start.
Red Flag Deals is a very good website.

Re: Mortgage rates
 

Our general experience with HSBC is rubbish.

Timeline was like this

Friday - go into bank, book appointment , specifially ask what we need to bring for pre-approval. Told nothing fro pre-approval, we need documents for actual mortagge when we pick house.
Tuesday 3:30pm- they are 20mins late for appointment, then tell us there is no time to do it all and we haven't got the documents they need. First next appointment friday
Friday- go through it all with our documents that we did need after all. Told we would get pre approval by monday or tuesday. tuesday comes, I chase up. Guy says sorry I didn't do it friday I was too busy and then I don't work mondays. He will do it urgently above other urgent work and will be thrusday at earliest. I send stroppy email. Still not got pre-approval yet.

tuesday - deal with broker. All sorted by weds

HsBC will offer prime-0.5%.

This experience echos all of our experience with HSBC and I am still not sure why we are so lazy that we haven't transfered

Re: Mortgage rates
 

Ugh, doesn't sound good.... I have no complaints about them, but then haven't used them for anything other than day to day banking.

How does one go about selecting a reputable mortgage broker?

Re: Mortgage rates
 

can i just say what an awesome thread is. im about to buy my first place here in calgary... ive been pre-approved for 3.9% for a 10 year fixed. accelerated payments seem like a good option, but the real question is whether to pay down the mortgage or to let it sit when shares are also cheap

for example, shares in my company went from 3.20 when i bought in sept 2010 to about 9.00 today... in an expansion cycle (especially here in calgary), it seems equities could be a far better bet than mortgage, especially when im locked in @ 3.9% for 10 years

comments?

Re: Mortgage rates
 

A lot depends on your age and risk tolerance.

3.9% is roughly equivalent to a risk-free 6.5% pre-tax investment return. That is not at all a bad return in the current economy and it is guaranteed. For someone my age (50s) reducing debt is a more important priority than speculating in equities.

If you are young you can probably take the risk in equities because a) there will be likely be a couple of economic cycles between now and when you need the money and b) over 25 years inflation will take care of a good deal of your mortgage.

Re: Mortgage rates
 

I have now been in Oakville, Ontario for 18 months and was definitely worried about getting a mortgage. I wanted my children to feel settled as quickly as possible and buying a house would help this. My realtor gave me the name of an independent mortgage broker who has been a goldmine of useful information. I would highly recommend him to anyone wanting to buy a house as there are options for people with work Visa's aswell as PR. His name is Jacques Du Preez - 1-888-707-4995. I have found this forum to be useful as I found my car insurers on here too!

Re: Mortgage rates
 

I found my mortage rate (prime - 0.75%) through http://www.ratesupermarket.ca/.

Alternative: http://www.ratehub.ca/

They straight up show you the best rates, and then even if you've already got a broker - you should show them the website and say "this is the rate I want". That's what we did back in August 11 :) Worked a treat.

Re: Mortgage rates
 

Me thinks you obtained that rate sometime ago:p

Re: Mortgage rates
 

I just tried the top site as I have just renewed my mortgage. It gave a best rate of 1% higher than my bank initially offered me at renewal, before we began to negotiate:thumbdown:

Re: Mortgage rates
 

Are you comparing like with like? Fixed vs Variable? etc

Re: Mortgage rates
 

I know people believe I am stupid, but I am able to work out things like that.

I clicked on Alberta, renewal, offer letter from bank (or whatever it was) and the best it came up with was 4.00% open (open is what I have). I have a 3 year one. Having just done it again, it gave a rate closer to what I received but, again, not as low as the one I was offered or as low as I finally received.

I appreciate that there are many variables: for some reason, banks always lower the rate when they discover I am a lawyer :confused:, and the loan to value ratio etc.

Re: Mortgage rates
 

Haha typo. Meant -0.75

(in my head I was thinking 2.05)

But congrats on beating the website! I genuinely haven't had anyone do that before! Although your bank obviously offer better rates for renewing, fortunately.

And yes they do offer lower rates for professionals, lawyers, doctors etc.

Buddy at the bank told me he wanted to give me a better rate, and would have done it for me if I was more smarter.

Re: Mortgage rates
 

This is interesting stuff.

When we arrived in Oakville in 2000 we both set up accounts with Scotia. We subsequently moved to Gatineau (QC) in 2004). My missus moved her account to the Scotia branch here. I left mine where it was. Our mortgage is currently with the Gatineau branch of Scotia.

I had a call from Oakville yesterday reminding me that one of my GICs matures in a couple of days. All my RRSP is in GICs; that is all Oakville can sell me because of the difference in provinces. He guy basically said that GIC rates are crap, not going to get any better and that I should move my account to QC to have access to better options.

He also told me told go argue the toss about the mortgage. We're four years into a 5-year fixed at 5.79%. We could almost halve that (2.99%). Even if we had to pay the full penalty for early redemption, which is apparently highly negotiable, we'd still get our money back in under a year.

For some reason - I didn't ask the question - he told me to avoid variable rate mortgages.

Re: Mortgage rates
 

They're gonna tell you to avoid variable because they don't make as much money from them haha.

But seriously, still a valid choice. There's lots of research if you take the time to search for it. Personally, I'm very comfortable with having a variable for the next 5 years. I figure the amount I'm saving now, rather than paying a fixed rate, will offset whatever happens when the interest rate goes up in the future.

Re: Mortgage rates
 

I agree. The difference was big. We got prime minus 0.80 to go varaible. The same would have been +0.49 to fix. Interest rates aren't going up by that much for a while. We have a short amortisation (possible due to the low interest rate) and can increase that if things runaway on us. At the beginning of our loan we are paying way less interest than we would have done to fix.

Also if interest rates runaway on us in Calgary I think that means over heated economy and better salary rises.

Re: Mortgage rates
 

I don't know what the name for my mortgage type is, but I think it's a good option.

I have a five year mortgage where I pay a fixed amount ( I think this is equivalent to 5% per year. Within that the mortgage interest rate varies, so the real rate I pay is about 2.4% at the moment. However, because I make a fixed payment every month, I'm paying about $400 per month in interest, and the rest is paid to the principle. If interest rates increased above 5%, the amount I pay still stays the same, but a smaller proportion is paid off the principle.

As rates have been significantly lower for the whole of the last five years, this means that I only have about 11 years of payments to make to pay off the mortgage in full. It's always seemed to be a better option than fixed (as I take advantage of lower overall rates) and variable, as I still know how much I'm paying each month.

Re: Mortgage rates
 

It sounds like you are on a variable rate mortgage. Most variable mortgages in Canada take the same amount of money from your bank account each month and simply weight the interest payment/principal payment depending upon the rate at the time. They do not increase/decrease each month as an English mortgage does. However, unlike an English mortgage where the repayment period remains the same, the Canadian ones increase or decrease the repayment period (referred to as the amortization period here).

Re: Mortgage rates
 

Thanks for the clarification. I never got the handle on the new fangled mortgage terminology over here....

In other news, I think that one of the rate comparison sites suggests that variable rate mortgages are typically better value for money than fixed. IIRC, this was 81% of the time....

Re: Mortgage rates
 

Variable rates are usually cheaper than fixed because you take the risk of rising interest rates. With a fixed rate the bank is taking the risk - and they charge for it.

Re: Mortgage rates
 

Can't find the data right now to back it up (someone here can tell me if I'm wrong) but I was informed that historically over the last 20 years variable has been the better option by far.

Re: Mortgage rates
 

That's Not the way my discount rate variable mortgage works. The bi-weekly payment varies with the prime interest rate (I have prime - 0.8%) so every time prime changes the payment changes. The amortisation period/term doesn't change. I took this mortgage out when rates were a lot higher. Some years ago I told them not to reduce the payment any further so have been overpaying for a few years. That, will of course, reduce the overall mortgage term.

I too, recall, seeing or reading something similar. I've ridden the rollercoaster of variable rates for the past 7 years and done substantially better than a fixed rate. Our locked in period expires next year so I'll have to see what to go for at that time.