# 1st time Mortgage renewal



## snowbird (Jun 14, 2012)

Hello

My 3-year fixed rate of 2.79% at Scotia is up for renewal in a few months. This is my first time doing this. I have received an offer of 2.79% 3-year fixed or 2.99% 5-year fixed for renewal.

- Am i able to shop around and possibly transfer the mortgage to a different institution or is there a penalty if i do this? 

- I am thinking of going variable for the next 3-5 years. What kind of rates are people seeing in Calgary?

- I would prefer to pay my property taxes myself as i would like to pay this upfront every year to stop Scotia from holding 'tax account credits' on my behalf. Is there any reason i wouldn't be allowed to?

Any advise/thoughts for me before i go to talk to the bank would be very much appreciated.

Thanks


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## HaroldCrump (Jun 10, 2009)

snowbird said:


> or 2.99% 5-year fixed for renewal.


That is not a bad rate.
If you can get it down to 2.89% that'd be great.
I recently renewed at 2.89% with Scotiabank.

You can do that by shopping around and asking them to match the rate.
In my case, I was able to get an offer of 2.89% from CIBC and asked Scotiabank to match it.

You can also work with a mortgage broker to get the best rate.



> - Am i able to shop around and possibly transfer the mortgage to a different institution or is there a penalty if i do this?


If your mortgage is renewing, you should be able to transfer to another lender without any penalty, unless you have one of those *collateral mortgages*.



> - I am thinking of going variable for the next 3-5 years. What kind of rates are people seeing in Calgary?


I can't speak for Calgary, but you should contact a local mortgage broker to get the best rate.
I was on variable rates since 2009, but went with fixed this time around.
I didn't think the spread between variable and fixed rates was worth the 5 year risk at this time, but that's a personal reason.



> - I would prefer to pay my property taxes myself as i would like to pay this upfront every year to stop Scotia from holding 'tax account credits' on my behalf. Is there any reason i wouldn't be allowed to?


Not unless you have a high ratio mortgage.
You should pay your own property taxes.


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## Addy (Mar 12, 2010)

I agree with contacting a Mortgage Broker. We have received excellent service from our broker on at least six properties now and no bank or financial institution will match the rates and conditions he is able to get for us. If you're in the GTA (or anywhere in Canada really, we have used him to purchase property in Vancouver and Winnipeg) and want his name I can pass it along to you via PM, but any mortgage broker will be able to help you.


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## Eclectic12 (Oct 20, 2010)

snowbird said:


> ... I would prefer to pay my property taxes myself as i would like to pay this upfront every year to stop Scotia from holding 'tax account credits' on my behalf...


I can understand wanting to keep the property taxes in an account to benefit one's self instead of prepaying it to the mortgage company. I'm not sure why one would want to prepay the city as this is just changing the benefactor from the mortgage company to the city.




HaroldCrump said:


> snowbird said:
> 
> 
> > ... Is there any reason i wouldn't be allowed to?
> ...


If so, it's a change as when I setup my first mortgage, which was a high ratio one - the choice was mine.
There was lots of encouragement to have the mortgage company take care of it, of course.




HaroldCrump said:


> ... You should pay your own property taxes.


IMO, if one has problems taking care of one's own property taxes - how does one expect to juggle a mortgage, house maintenance etc.?


Cheers


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## snowbird (Jun 14, 2012)

Thanks for the responses. Appreciate it.

As an aside, I'm not having any problems taking care of my property taxes, thank you. 

Harold is right - at the time, my mortgage was considered high ratio (less that 20% down). Since then i've made a couple of lump sum pre-payments so it is no longer necessary for the bank to pay the taxes on my behalf. Just confirmed this over the phone with the bank and I will be paying the taxes when due, in lump sum to the city. (although he tried to tell me that everyone else prefers the bank to pay it for them as part of the mortgage payments)

Renewal is 6 months away but the bank rep i spoke to indicated i had until this Friday to come in and accept the offered rates??. Should i wait until closer to renewal to shop around for rates from mortgage brokers or is this a good deal to lock-in to now? I plan on paying the mortgage off in the next 3.5 years so i'm leaning towards a 3-year rate. 

Cheers


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## Just a Guy (Mar 27, 2012)

Remember to reduce your amortization timeframe as well...otherwise you'll never pay the thing off.


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## Eclectic12 (Oct 20, 2010)

Re: There's no problem paying annual property taxes.

Hopefully my misquote didn't suggest there was ... :biggrin:


Re: Mortgage was high ratio.

So what you are saying is that your high ratio mortgage *required* the property taxes to go through the bank?
Interesting change ...


Re: Others prefer to have the bank take care of the property taxes ...
The gas, electric and water companies have all said the same thing where the usage varies through the year. I've stuck to paying them as it comes due regardless of what others prefer.


Re: Renewal is 6 months away but the bank rep i spoke to indicated i had until this Friday to come in and accept the offered rates??

Typical hard sell technique to get you to jump before having a chance to find better rates/terms. 


Re: Should i wait until closer to renewal to shop around for rates from mortgage brokers or is this a good deal to lock-in to now?

If you haven't checked the what available in Calgary - how can you be sure it's a good deal?

I'd contact a mortgage broker as well as check with other financial institutions. This may give you some details to start asking for a better rate.

A quick good search found the following links for an idea of what's out there.
http://www.lowestrates.ca/mortgage/calgary
http://www.ratehub.ca/mortgage-rates-calgary

For a broader perspective, there is Cannex.
https://www.cannex.com/public/mort02e.html 


The earlier you start ... the more time you have to compare features (not all mortgages are the same & give the same privileges) as well as rates.


Here are some articles that may help.
http://www.canadianliving.com/life/money/6_tips_to_help_you_renew_your_mortgage.php
http://www.theglobeandmail.com/glob...ewing-your-mortgage-be-a-hero/article1370984/
http://www.canadianliving.com/life/money/get_a_better_mortgage.php


Cheers


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## dougboswell (Oct 25, 2010)

The bank is trying to lock you in now by offering a terrible rate. Right now 3 year rates can be found for 2.39% and variables for 2.2%, A 5 year rate can be found for 2.67%. Keep in mind that these probably require a closing in 30 days. The farther you are away from your renewal the higher the rate that will be quoted.

Will interest rates rise in the next 5 months? Probably not but no one can give a definite answer, Variable rates are based on the prime interest rate. The Bank of Canada has not raised it for a long time. The chances of them raising it in the next 5 months is extremely low. You will probably find the same variable rate in 5 months that you find today. Fixed rates are based on bond yields. 5 year rates have stayed under 3% for quite awhile also.

It is you who has to choose whether to renew with your bank 6 months out or wait until you are within 2 months. If it was me I would be waiting until 1 or 2 months out.

To give you an idea of the rates out there visit www.ratespy.com. You select your province, the type of rate you want and the length of the term. It will show you the lowest rates offered in your province and by whom. 

Usually you can switch lenders on the day your mortgage is to be renewed. You cannot change any of the terms. Most lenders pick up the cost for you. However lenders also have a minimum amount for a mortgage before they will take it over. If you happen to fall below this amount and are forced to stay with your lender I personally would not sign 6 months out


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## Mortgage u/w (Feb 6, 2014)

snowbird said:


> Hello
> 
> My 3-year fixed rate of 2.79% at Scotia is up for renewal in a few months. This is my first time doing this. I have received an offer of 2.79% 3-year fixed or 2.99% 5-year fixed for renewal.
> 
> ...


See with Scotia if your mortgage is transferable....you may not be able to switch without incurring title fees.
Find a reputable mortgage broker. They will be able to offer the best rate and product for your needs. They work on commission so they may, at their discretion, buy down the rate further from their commission or simply give you a kick-back to cover any fees you may incur.
If you want to search the best rates on your own, you will quickly notice that there are better rates online than what was quoted to you. You can definately negotiate with Scotia and save yourself some time.


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## banjopete (Feb 4, 2014)

I would definitely speak to a broker, no harm in getting more information. After going through this very same process with a broker I was very surprised at how our bank of many years treated us. They offered us better rates, but far from competitive and the additional payment terms other lenders were offering. When we finally started going back and forth with our bank they stopped well short of the rate and options we eventually got by going elsewhere.

Even if you don't change lenders you'll learn how insignificant you are to your bank. In my opinion, people that fuss and take the time to come from a knowledgeable position into this renewal experience are so few that the big banks don't fight too much to retain them. Why bother with a tiny percent of a tiny percent while the other 99% gladly pay fees on fees at non competitive rates in big spoonfuls. After all, they don't make billions a quarter from thin air right?


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## OurBigFatWallet (Jan 20, 2014)

I'm in Calgary and my lender did something similar. Don't settle for their first offer. They're trying to lock you in now for a crappy rate. Look around online and if you see a lower rate anywhere see if they'll match it (if they're smart they will). If not - leave. No penalty for shopping around and they know that. Make them work for your business, right now they don't seem to be trying very hard. Ive seen a 5 year variable as low as 2.15%, but that was a couple weeks ago and haven't looked since then. I pay my taxes myself and there was no penalty for it. Calgary has a TIPP program where they come out monthly and there is no extra charge for this


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## williemoore333 (Dec 18, 2014)

I would also suggest that if it’s time for your mortgage renewal; consult with your mortgage broker. They will help and advise you the best in this matter. They will provide assistance with your credit score, interest rates and other market benefits. I had consulted with canadalend.com and received valuable information regarding my mortgage. It helped me to get the best investment and saved money as well.


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## snowbird (Jun 14, 2012)

Update - I decided to go with a broker, who found me a rate of prime - 0.85%. The main reason i decided to move was due to the unresponsiveness of the Scotia personal advisor. However, at the last minute, the advisor came back to say that Scotia would match the new rate, to which i responded that it was too late to go back now. Scotia then took a long time in responding to the request for documents and proceeded to renew the mortgage for 6-months at a rate of 6%. Now i am being asked to pay hundreds of dollars more in interest. I don't think this is fair, and i am unable to reach the folks at Scotia to clarify. What do you advise? Is this normal?


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## Addy (Mar 12, 2010)

snowbird said:


> Update - I decided to go with a broker, who found me a rate of prime - 0.85%. The main reason i decided to move was due to the unresponsiveness of the Scotia personal advisor. However, at the last minute, the advisor came back to say that Scotia would match the new rate, to which i responded that it was too late to go back now. Scotia then took a long time in responding to the request for documents and proceeded to renew the mortgage for 6-months at a rate of 6%. Now i am being asked to pay hundreds of dollars more in interest. I don't think this is fair, and i am unable to reach the folks at Scotia to clarify. What do you advise? Is this normal?


Do you mean the documents requested by your broker?


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## snowbird (Jun 14, 2012)

Yes, the documents requested by the new lender in order to pay Scotia out.


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## RBull (Jan 20, 2013)

It sounds like the costs associated with the delay should be borne by Scotia, if you met whatever dates you needed for their original terms of renewal. It appears the delay is theirs and not yours or your new mortgage holder. Also the 6% was not what they had offered you, so why would this be the rate even if something was due? Do they not need a signature to renew?

However I am not familiar with mortgage renewals so can't say for sure or comment if this is normal or not. I would suggest you speak to your broker and/or new lender to get assistance and advice.


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## rsyl (Aug 15, 2014)

RBull said:


> Also the 6% was not what they had offered you... Do they not need a signature to renew?


The probably pushed the OP into a open 6 month mortgage 

(per Scotia site:
Rates More details

6.55%
6 Months Open Term
6.60%
1 Year
Open Term). they would have put you in a open mortgage because you need to have a mortgage (since you did not pay it in full). I would fight the charges with the broker and the bank, you will probably have better luck fighting the broker who has some leverage with the bank.


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## Ernest Rother (Nov 19, 2015)

*7239*

I would suggest a second mortgage mainly because as OurBigFatWallet said, the first offers generally tend to be a scrappy affair. Second mortgage is great way to consolidate debts. Even though these are higher than the first option, they help in improving cash flow. I’ve seen a 2.1% rate on a 5 year variable mortgage which looks an absolute steal considering the options available.


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## My Own Advisor (Sep 24, 2012)

re: Update - I decided to go with a broker, who found me a rate of prime - 0.85%. 

Great call.

I also got a similar deal for my mortgage and took that. The changeover for me happens in another 2 weeks.

Sorry to hear about the interest - but sometimes there are PITAs involved in switching lenders. That includes the mortgage discharge fee.


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## tombiosis (Dec 18, 2010)

On the "discharge fee"...I have a question.
Do banks just charge whatever they want? I assume this fee is for a lawyer to remove lien on property\? What if you pay it off in full at maturity? Does this fee still apply? I asked my lender and they said yes. To me, this is wrong. If I pay it in full they should give me a receipt saying so, with a big thank you. The fee is ridiculous.
If its for a lawyer, then I should be able to offer up a cheaper lawyer! lol or offer to fill out the forms myself!
If I were paying it off in full I would like to say to them: " I am paying it in full, and in order to do so I charge a fee...please remit one thousand dollars to me so I can discharge my funds to you"
Reminds me of the ridiculous "paper bill fee" I get from Bell...


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## My Own Advisor (Sep 24, 2012)

No, mortgage discharge fees are provincially regulated, via financial services commissions

Consider it a "goodbye kiss that costs".

If you are transferring your mortgage, to a new lender, some of them if you negotiate well will pick up that tab.


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