BMO and TD offering a 2.99% five year fixed

[Teh_Bandwagoner]

Ugh I just missed out. My mortgage matured in December. I locked into my new mortgage at 3.09% for 4 years then.

Oh well...still beats the 24% my parents had to pay back in the early 80s

[squiggs96]

Originally Posted by Slava

I have a similar set-up but through Manulife and use it similarly. I think its more common than it was a few years back, but you do run into people who just don't understand how it works.

What I really like about this is you can set up subaccounts. I use the main account as my everyday account and then when I buy an investment property I set up a subaccount. The total limit is still what was originally set up when I purchased my home, but I can keep my properties separate without opening a completely new bank account. It's easy to see what the monthly interest is and if I ever get audited by CRA the backup is clear and straight forward. I can transfer money between the accounts and as long as I own my home, I basically have a large LOC at prime. I'm at prime because I purchase in December 2008 and it was one of the last prime LOCs given out in Canada.

[chemgear]

Originally Posted by fotze

I want to buy a house just to get that rate. Chemgears market crash just moved that much further in the future. By the time it crashes everyone will have paid off their mortgage and not give a crap.

"It's a great time to buy/sell!"

Seriously though, good rate if you can take the slight restrictions.

[Radio]

Squiggs do you have the 100% LOC or the Mortgage/LOC? Which would you recommend...if you don't mind me asking.

[Slava]

Originally Posted by Radio

Squiggs do you have the 100% LOC or the Mortgage/LOC? Which would you recommend...if you don't mind me asking.

I don't know all the ins and outs of the National Bank product, but through Manulife the other thing that you can do is lock in pieces of the outstanding balance. So if you were sitting today at $300k and were worried about a spike in rates you could lock in say $200k for five years and let the rest float. I just picked five years there as an example, but you could also ladder this with different maturities or terms as you saw fit.

You could start with the 100% and switch it as time goes if you like.

[Slava]

Originally Posted by squiggs96

What I really like about this is you can set up subaccounts. I use the main account as my everyday account and then when I buy an investment property I set up a subaccount. The total limit is still what was originally set up when I purchased my home, but I can keep my properties separate without opening a completely new bank account. It's easy to see what the monthly interest is and if I ever get audited by CRA the backup is clear and straight forward. I can transfer money between the accounts and as long as I own my home, I basically have a large LOC at prime. I'm at prime because I purchase in December 2008 and it was one of the last prime LOCs given out in Canada.

Ya, Manulife operates that same way (pretty sure National copied it very similarly, although don't they have fees on each subaccount?). I also like ghat within the sub accounts you can have transactions set (I'm mainly talking withdrawals here so that you can invest an its all tracked cleanly).

[squiggs96]

I have the 100% LOC. None of my balance is locked into a conventional mortgage, although I have the option to do so. The two main reasons for me not putting any balance into a mortgage are my LOC is at prime and I haven't seen anything much below this and I like the flexibility of the LOC.

My compensation from my job is about 65% salary and 35% bonuses. My bonuses are very easy to predict, so they are more like lump sum payments. I like being able to take a bonus and when it gets deposited the principal goes down and my daily interest goes down. I'm a CA and a Controller, so I am well versed in accounting, tax and finance, so the product makes sense for me. It doesn't make sense for many people who aren't able to budget or manage their money as closely as I do. My original goal was to pay off the balance in seven years. In the first three years I've paid off 49% of the balance. If you take out the amounts I've used to buy rental condos, I've paid off 77% in the three years. Based on a traditional, 25 year mortgage at 3.34%, with the same mortgaged amount, after three years I would have only paid off 8% of the balance.

This product only works if you are disciplined. I know there would be some people who after three years wouldn't have paid off any amount as you can do interest only if you want. These are the people that should take a traditional mortgage as they need the discipline enforced by the bank.

As for fees in the NBC account, the first account is free and each subaccount is $2.50 per month. There are no fees for any online transactions, bank machine transactions (including those banks that are on The Exchange), automatic payments/withdrawals and deposits at a teller. The only fees I pay are when I use the teller to withdraw money.

[macker]

Originally Posted by Slava

Ya, Manulife operates that same way (pretty sure National copied it very similarly, although don't they have fees on each subaccount?). I also like ghat within the sub accounts you can have transactions set (I'm mainly talking withdrawals here so that you can invest an its all tracked cleanly).

I think National copied it but also has a better offering. There is no fee for the first account and then $2.50 per subaccount whereas Manulife charges $14 per account IIRC. Also more stability in the National Bank rate as it is consistently based on prime + or - and Manulife has based the rate on prime + or - but has also moved away from this on occasion. Also National Bank was ranked as the strongest bank in North America : http://www.nbc.ca/bnc/files/bnc10210/en/2/index.html
I have seen people make their own AIO account though and it is quite effective if used properly.

[squiggs96]

About five months ago BMO asked if I would switch to them. I said sure, if they could meet the prime rate I was getting at BMO and give me some incentive to move over, like paying for my annual credit card fee or something. I was willing to switch because at the time NBC didn't accept Interac E-Transfers and my work does a tonne of business with BMO so I thought it might carry some favour. BMO was unable to match the prime rate and could only do prime + 0.5%. I was happy to stay, but if a better offer that can benefit me both short and long term, I'm open to listening.

[photon]

Heh that's funny, I've had that exact same conversation with BMO a few times over mortgages we have with other institution.

Sure I'll move over, can you match or beat x? No? Alrightythen.

[Slava]

Originally Posted by macker

I think National copied it but also has a better offering. There is no fee for the first account and then $2.50 per subaccount whereas Manulife charges $14 per account IIRC. Also more stability in the National Bank rate as it is consistently based on prime + or - and Manulife has based the rate on prime + or - but has also moved away from this on occasion. Also National Bank was ranked as the strongest bank in North America : http://www.nbc.ca/bnc/files/bnc10210/en/2/index.html
I have seen people make their own AIO account though and it is quite effective if used properly.

No, the Manuife rate is a flat $14. You can set-up and name subaccounts and there is no charge for these. The Manulife rate isn't actually a set prime +- either. It was at prime until about October 2008 at which point prime continued dropping and Manulife didn't follow suit. I think it was the last time prime increased though when Manulife didn't increase. I *think* that as rates rise in the next few years that the Manulife rate will not rise at the same rate, but there is nothing in writing that I could point to there.

[Brotato]

Glad to find this thread - I renewed today at TD about 8 months in advance (Mortgage due up in July) at 4 years at 2.89% (extra discount for having had 3-4 mortgages with TD, best my long-time advisor could do). This beat anything the brokers had.

As an aside, you'l likely not get your mortgage with anyone else if you aren't in a renewal period. For instance, if I had taken my mortgage, due for renewal in July, to another place (tried using a really good broker, PM me if you need a name for what it's worth, he is a CPer), but they wanted near $6,000 to pay out the mortgage 8 months early!

Ridiculous....

So the moral of my ramblings

1) Call your bank, even if you are mid-mortgage and see what they can do for you. You may get a break (or the savings will be greater than your penalty)

2) If you aren't up for renewal, the chances of having a new lender pay out your early payout penalty and take on your mortgage at 2.99% is about zero. I asked my broker if anyone would and he said no. So if you can get 4/5 years at 2.99% early-renewed with your current lender, IMO, go for it.

[Mike Oxlong]

I know I am pretty late to this party but I just wanted to share the restrictions on this BMO mortgage. It is a good rate no doubt but you do have to be careful what you are getting into:

- max amortization 25 years (no exceptions)

- pre-payments capped at 10% and 10% (no exceptions)

- you are not allowed to miss or “skip” payments for any reason (no exceptions)

- only available until Jan 25th

- rate hold only 90 days; if rates go down in that time no float down allowed, must close within 90 days from date of application (not date of approval) (no exceptions)

- rate not available on their Homeowner Readiline (similar to all in one mixed fixed and variable mortgage)

- you are completely locked in until maturity

- only way you can break this mortgage is through moving, dying, refinancing or renewing with them at a similar or higher term (no exceptions)

- when you move, the IRD is so high because of the deep discounting that you have little option but to keep it with them

Just wanted to give everyone the heads up on the details. While it is a good rate there are a number of lender at 2.99% on a 4 year rate that are much better options. Not nearly as restrictive and have full prepayment options.

PM me if anyone has mortgage questions at all.

[macker]

http://mobile.bloomberg.com/news/201...s?category=%2F

RBC and BMO warn one week and then lower rates the next....Flaherty today was saying they are watching the condo markets in Vancouver and Toronto and may be forced to step in Maybe BMO is trying to draw more people out of variable and into fixed....still an interesting tactic.... How about the 10 year at 3.99%

[macker]

More on the BMO 2.99% :

http://www.mortgagebrokernews.ca/for...e-hugh/123386/

http://www.canadianmortgagetrends.co...-mortgage.html

[photon]

ING Direct is offering their Unmortage for 10 years for 3.99%

http://www.ingdirect.ca/en/mortgages/index.html

I guess that tells us where the bank is thinking rates will be in the next 10 years?

[nik-]

that 10 year is 1.85% lower than the 5 I'm in right now haha. Thank god my renewal comes up in November ... I can only hope the rates stay low.

[ah123]

Originally Posted by macker

http://mobile.bloomberg.com/news/201...s?category=%2F

RBC and BMO warn one week and then lower rates the next....Flaherty today was saying they are watching the condo markets in Vancouver and Toronto and may be forced to step in Maybe BMO is trying to draw more people out of variable and into fixed....still an interesting tactic.... How about the 10 year at 3.99%

Talking to our mortgage person at TD, she mentioned that they (TD) have a lot of mortgages that are coming due this year. By bringing these offers out, they are hoping to lock in a lot of those customers for the next 4 or 7 years (and thus guaranteeing a certain amount of money coming into the bank) - I had never thought of it in that light, so it was definitely eyeopening.

[blankall]

Originally Posted by squiggs96

About five months ago BMO asked if I would switch to them. I said sure, if they could meet the prime rate I was getting at BMO and give me some incentive to move over, like paying for my annual credit card fee or something. I was willing to switch because at the time NBC didn't accept Interac E-Transfers and my work does a tonne of business with BMO so I thought it might carry some favour. BMO was unable to match the prime rate and could only do prime + 0.5%. I was happy to stay, but if a better offer that can benefit me both short and long term, I'm open to listening.

Are you talking fixed or variable?

I was able to get prime -.9% in April on a variable. Would probably switch to the 2.99 fixed. Although, the way things are going I still might come out ahead.