Mortgage rates are going back up

[photon]

Originally Posted by Mike Oxlong

I've been meaning to talk to you about that. You should find yourself a safehouse or a relative close by. Lay low for a while because your probably wanted for Murder.

Actually he meant the guy he killed had a trident.

I think that means that BBS is now the king of the ocean.

[Sidney Crosby's Hat]

ATB is offering 5 years at 3.50% for 90 days until Monday night. I'm going that route, set up an appointment for 2:00.

[Bob]

Originally Posted by Sidney Crosby's Hat

ATB is offering 5 years at 3.50% for 90 days until Monday night. I'm going that route, set up an appointment for 2:00.

Hmm... I'm just shy of two years into a 5-year term at 5.09%. Is it worth it to jump over at 3.5%? The only problem is that I have no idea what my payout penalty would be. I've heard it's three months interest, which wouldn't be too bad, I guess. It seems like I would be saving roughly $200 / month, so that could pay for itself in one year.

[Sylvanfan]

Will ATB lend to someone in BC?

[albertGQ]

Originally Posted by Sylvanfan

Will ATB lend to someone in BC?

No they won't

[MaDMaN_26]

Originally Posted by Sidney Crosby's Hat

ATB is offering 5 years at 3.50% for 90 days until Monday night. I'm going that route, set up an appointment for 2:00.

On the phone with ATB right now. He just confirmed the 3.5% rate will be going up next week (Monday) today and tomorrow will be the last days to act on this if you want... I'm starting the process... Then I have till Oct 1st to finish the procedure at this 3.5% rate.

So my open variable is 1.5% right now... really struggling with what I should be doing here... while having 1.5% for the next year is appealing, so is 3.5% for the next 5, given that I'm thinking that 4-ish of those years could be me paying a much higher variable than 3.5...

*help*

[Draug]

Originally Posted by Bob

Hmm... I'm just shy of two years into a 5-year term at 5.09%. Is it worth it to jump over at 3.5%? The only problem is that I have no idea what my payout penalty would be. I've heard it's three months interest, which wouldn't be too bad, I guess. It seems like I would be saving roughly $200 / month, so that could pay for itself in one year.

It will be the GREATER of 3 months interest, or the interest rate differential. The IRD is the rate you have minus the current posted rate at that lender, and that is multiplied by your principal for the remaining term on your closed mortgage.

I'm in a similar situation, but at a worse rate even. I've started the process at ATB, and my payout should be well over $12,000.

[Bob]

Originally Posted by Draug

It will be the GREATER of 3 months interest, or the interest rate differential. The IRD is the rate you have minus the current posted rate at that lender, and that is multiplied by your principal for the remaining term on your closed mortgage.

I'm in a similar situation, but at a worse rate even. I've started the process at ATB, and my payout should be well over $12,000.

I guess I'll have to look into it some more. In the mean time I found this site which helpfully calculates the penalty for breaking a mortgage early. I'm not sure if I put the numbers in correctly, but it quoted me a break-out price of $22k.

[lucky1]

Originally Posted by Mike Oxlong

To be fair to her, those rates all went up in a matter of a few hours yesterday. They could have been at 3.75% when you spoke with her and if she wasn't around her email or wasn't aware they increased she could have been in for a surprise when she got back to the office.

It was a crazy day.......

So, whats your final take on the 'lock it or leave it' dilemna....if a person has a variable open at prime minus.....ride it out or pick up the phone and call ATB?

thanks

[Mike Oxlong]

Originally Posted by lucky1

So, whats your final take on the 'lock it or leave it' dilemna....if a person has a variable open at prime minus.....ride it out or pick up the phone and call ATB?

thanks

Well I am actually in that exact situation with my place. I am at Prime -.35, which effectively makes my rate 1.9% right now.

I debated locking in at 3.5% as well however when you are in a Prime minus situation, Prime has to increase quite a bit before you even get to that 3.5% rate.

In my case Prime needs to increase to 3.85% for me to be effectively paying 3.5%. With Prime at 2.25% now and it forecasted to stay there until June of 2010 I am pretty happy with my rate of 1.9% for the next year at least. Even when rates do start to rise they are not immediately going to jump to 3.85 or 4%. It will take some time to get there.

I guess my thoughts are if you are in a Prime minus situation I would ride that our for as long as possible. Take advantage of paying 1.9% or even less in a lot of cases for interest. That discount you are getting off of Prime is a nice little cushion to have even when rates to start to eventually rise again. Prime has to rise significantly for you to be even close to paying 3.5%.

If you were in a variable rate that was in a Prime plus situation I think that is a totally different scenario. You are in a far worse position when rates eventually do start to rise. Even now you are likely paying something in the 3% range. I think it makes sense for anyone in that situation to lock in at 3.5% for sure.

[albertGQ]

I can't beleive I have two friends that are still in a P-1.50% mortgage. They are paying 0.75%!!!

I am sooooooooooo jealous

[MaDMaN_26]

Originally Posted by Mike Oxlong

Well I am actually in that exact situation with my place. I am at Prime -.35, which effectively makes my rate 1.9% right now.

I debated locking in at 3.5% as well however when you are in a Prime minus situation, Prime has to increase quite a bit before you even get to that 3.5% rate.

In my case Prime needs to increase to 3.85% for me to be effectively paying 3.5%. With Prime at 2.25% now and it forecasted to stay there until June of 2010 I am pretty happy with my rate of 1.9% for the next year at least. Even when rates do start to rise they are not immediately going to jump to 3.85 or 4%. It will take some time to get there.

I guess my thoughts are if you are in a Prime minus situation I would ride that our for as long as possible. Take advantage of paying 1.9% or even less in a lot of cases for interest. That discount you are getting off of Prime is a nice little cushion to have even when rates to start to eventually rise again. Prime has to rise significantly for you to be even close to paying 3.5%.

If you were in a variable rate that was in a Prime plus situation I think that is a totally different scenario. You are in a far worse position when rates eventually do start to rise. Even now you are likely paying something in the 3% range. I think it makes sense for anyone in that situation to lock in at 3.5% for sure.

I pondered this all weekend long and while I still have to Oct. 1st to complete the ATB 3.5% deal I think hanging on to my prime -0.75% is the right move for now... like you say Mike, its going to be awhile before the rate goes up and it will have to go up to 4.26 or higher before I'd start to lose money, not taking into account how much I saved in the year or so while staying at 1.5%

I have never even heard of a prime plus open variable... why would anyone sign up for that? Bad credit? Terrible negotiator?

Husband: Honey let me handle this... (to banker) I want a discount off prime, if you want my business.
Banker: No
Husband: Then fine I will only pay 1% more than your posted rate.
Banker: Deal, sign here
Husband: haha stupid banker, I got you.

[mykalberta]

Reading this thread makes me want to cry at how much I am paying for a 10yr fixed singed in 2006

[albertGQ]

Originally Posted by mykalberta

Reading this thread makes me want to cry at how much I am paying for a 10yr fixed singed in 2006

What rate is that? 6% ish?

[mykalberta]

Originally Posted by albertgq

what rate is that? 6% ish?

5.15

[fundmark19]

Originally Posted by MaDMaN_26

I have never even heard of a prime plus open variable... why would anyone sign up for that? Bad credit? Terrible negotiator?

I have a prime plus open variable what is so bad about it? I am paying less then a closed rate plus I can pay out my mtg and jump on a good deal if mtgs rate lower plus there is no cost to me refinancing. As well if lending rates ease and they start offering prime or prime minus variable rates again I can jump back in at that point without penalties. I think its a great position to be holding right now. Not as good as my one property with prime -.75 but my other 2 are going to be prime plus options for right now.

[Rerun]

I see that as of today ATB still has their 5yr closed rate at 3.5%

[Suave]

Originally Posted by MaDMaN_26

I have never even heard of a prime plus open variable... why would anyone sign up for that? Bad credit? Terrible negotiator?

Husband: Honey let me handle this... (to banker) I want a discount off prime, if you want my business.
Banker: No
Husband: Then fine I will only pay 1% more than your posted rate.
Banker: Deal, sign here
Husband: haha stupid banker, I got you.

If you could find a place doing Prime Minus right now please share. Unfortunately due to this whole economic meltdown thingy, banks seem to have stopped giving out p- and variables are now p+. Hopefully once everything is back to normal then they will be offering p- again.

[Mike Oxlong]

Originally Posted by Suave

If you could find a place doing Prime Minus right now please share. Unfortunately due to this whole economic meltdown thingy, banks seem to have stopped giving out p- and variables are now p+. Hopefully once everything is back to normal then they will be offering p- again.

Yeah that is exactly it. As of October of 2008 Prime minus mortgages are a thing of the past. The best you can find now is Prime +.6 (one lender has a prime +.4 mixed mortgage)

If you want a variable rate then you have to pay Prime plus now.

[MaDMaN_26]

Originally Posted by Mike Oxlong

Yeah that is exactly it. As of October of 2008 Prime minus mortgages are a thing of the past. The best you can find now is Prime +.6 (one lender has a prime +.4 mixed mortgage)

If you want a variable rate then you have to pay Prime plus now.

See, I had no idea that was the case... sorry if my previous post offended anyone, I was just being tongue n' cheek about it... it just seemed strange to me is all... I had never even heard of a prime plus...

If I were in a open variable prime plus position right now I'd be all over that 3.5% rate ATB is going to eliminate soon... all you'd need is the prime to go up 0.5 or .75% to be happy about that decision...