Mortgage Broker

[Mike Oxlong]

Originally Posted by go iggy

Whats the best closed variable rate that you can get?

i have prime +.8 and another prime -.5

Best variables available right now are
Prime minus .3% on a 3 year and Prime minus .2% on a 5 year.

[Ace]

How far in advance of your mortgage expiring can you lock in a rate?

How much should the rate differential be before looking into discharging your current mortgage early? (i.e. if I'm currently on a fixed 5.1% may it be worth it to pay the penalty)

[Mike Oxlong]

Originally Posted by Ace

How far in advance of your mortgage expiring can you lock in a rate?

How much should the rate differential be before looking into discharging your current mortgage early? (i.e. if I'm currently on a fixed 5.1% may it be worth it to pay the penalty)

Fotze is right on everything except the lawyers fees. If you are just switching your mortgage from one lender to another and not changing anything then it is considered a "switch". In that case rather than going to a lawyer a company called FNF can handle it and many of the lenders will cover their fee so it doesn't cost you anything.

His explanation of the payout penalty is correct unless a 3 month interest penalty is greater than the "IRD" calculation.

I am able to get you a rate hold for 120 days. As soon as you are 120 days from your renewal I would reccomend putting a rate hold in place, just in case rates do go up between now and then.

[fundmark19]

Ya fotze they don't care how you pay off the mtg. I just got prime plus .05 as a retention offer on an open variable Mortgage. So you may be able to get that if you tell your bank you are moving

[fundmark19]

I am not a millionaire by any means. I was with scotia had Prime + .8 then found out BMO offered Prime + .7 like you did and was going to switch. Scotia called me said they would offer + .5 I said I wanted to refinance by like 30 grand and if they could get me some more info. Told BMO this and they matched the + .5 so after not hearing from Scotia for 3 days I told them to send the payout request.

I am 22 I do have 3 properties though. This Property was my main residence half of a duplex(don't own both sides) for 330 000 in New Brighton so by no means is it a very lucrative million dollar mtg or anything like that


*again this was a retention offer* So if your mortgage is up for renewal or you are looking to switch you may be able to swing it. Going through a mortgage specialist (the BMO side I dealt with) it needs special pricing authorization or if you are going through the bank (scotiabank side) Needed branch manager authorization*

[speede5]

OK, so how does this scenario look. Currently I am in year 2 of a 5 year 141,000 mortgage (Concentra). Intrest rate is 6.64. I asked about refi and they have come back with 5 yrs @ 5.38 with a 115$ admin fee. Balance owed is 137,800. If I pay a penalty ($6500) they will open it up and I can go for current rates with them. Penalty to go elswhere is $9400. Penalty would be out of pocket and I don't have that so does this sound like an ok deal? I wouldn't mind the lower rate as our payments are a bit high and that would give us some breathing room, or we would be able to make the odd double which is always good.

[speede5]

I guess the big problem is the buyout. It is a lot out of pocket, and should the rate jump a couple percent I am in the same boat in a year. I really like the smaller payments, even though we are surviving with the current ($417 Bi W Acc. Would drop to $368 with 5.38.)

Any ideas on how to buy it out when I am strapped? Are any mortgage companies offering incentives to move?

If I went variable at what point do the cost negate the gain? Say the variable rate climbs to 4 or 5 %. Is that a fair assumption given the indications they are going to be tightening the mortgage rules in the near future?

[speede5]

Staying with Concentra the penalty is lower but they aren't offering to lump it in. The original mortgage was $141K so lumping in at this point means I would owe $143K. I think if I pay the $6500 penalty I can go to variable with Concentra. That would reduce the break even from 17 months to 13 or so. Actually doesn't sound to bad.

Since the Mortgage was insured through Concentra I am under the impression moving it has complications.

[Mike Oxlong]

Originally Posted by speede5

I guess the big problem is the buyout. It is a lot out of pocket, and should the rate jump a couple percent I am in the same boat in a year. I really like the smaller payments, even though we are surviving with the current ($417 Bi W Acc. Would drop to $368 with 5.38.)

Any ideas on how to buy it out when I am strapped? Are any mortgage companies offering incentives to move?

If I went variable at what point do the cost negate the gain? Say the variable rate climbs to 4 or 5 %. Is that a fair assumption given the indications they are going to be tightening the mortgage rules in the near future?

If you want to lump the payout penalty on to the new mortgage you simply do a refinance. You can add that payout penalty on to the new mortgage you are qualifying for thus not having to pay anything out of pocket at all.

I wouldn't recomend going with a variable rate however. Those rates are set to start rising in June and we don't know how fast or how high they are going to climb. When you can lock into a 5 year rate for less than 4% right now then you know exactly what your payments are going to be for the next 5 years.

PM me and we can go over your situation ion a bit more detail if you want.

Even if it was insured with Concentra it can still be moved. It was just that Concentra got the insurance through CMHC but that can be transferred to the new lender.

[Ace]

Mike can we get an update on what the lowest 5 year fixed mortgage is at right now?

[Mike Oxlong]

Originally Posted by Ace

Mike can we get an update on what the lowest 5 year fixed mortgage is at right now?

Yes for sure...

3.69% if it closes by April 26th
3.79% I can get a 120 day rate hold on.

[Mike Oxlong]

Bond yields increased today giving banks a spread of about 1.11. Generally they need to be between 1.35 and 1.55 to keep 5 year fixed rates where they are today.

Good chance fixed rates could be climbing next week.

Even if you are considering buying or your mortgage is up for renewal within the next 120 days let me know. I can get a rate hold put in place for 120 days for you in case they climb. Might as well take advantage of today's low rates if you can.

[Mike Oxlong]

This week's rate update:
3.69% on a 5 year fixed with a 120 day rate hold.

Honestly these won't last forever. I know I keep saying rates are going to climb and they don't. One of these days they have to....

Take advantage of them while you can.

[Mike Oxlong]

Ok that day has finally come. Last week fixed rates took a fairly major jump. I knew it was just a matter of time, and that time has arrived.

Best 5 year fixed rate out there right now is 4.29%. Yes rates have climbed but keep in mind 4.29% for a 5 years fixed is still an amazing rate.

If you are looking for a variable I have a lender that is offering Prime (2.25% currently) less .5% which works out to 1.75% at this time.

[1stLand]

where do observers see prime at in a year from now?

[fundmark19]

1 percent higher then it currently is

[Mike Oxlong]

Originally Posted by 1stLand

where do observers see prime at in a year from now?

It's tough to say, it really depends a lot on inflation and if the Bank of Canada feels they need to raise interest rates to control it.

I would say an increase of 1% minimum but I would be surprised if it was more than a 2% increase over the next year.

[Mike Oxlong]

Here's an article that speculates when the Bank of Canada is going toi raise rates and by how much:
http://network.nationalpost.com/NP/b...-how-much.aspx

[Mike Oxlong]

Rates look like they are going to jump another .25% tomorrow. Royal Bank has already announced the hike and other banks are sure to follow.

That's twice in about 2 weeks.....

[1stLand]

I locked in at 3.5% on my mortgage last July.
Before that I was .85 below Prime, so I was below 2%.
But I considered the long term benefits of that attractive 3.5% rate.

Those higher 5 year fixed term rates are not so nice for first time home buyers