# Getting a mortgage for a condo in Ontario, making sure I'm getting descent rate..



## janimator0 (Mar 8, 2017)

5yr fixed with a 25yr amortization with exceptional pre payment options of 20% lump sum per year and 20% increase of payments. Fully portable and I can chose any payment frequency I like. Rate is 2.69.

Would love to do my best to pay off everything as fast as possible in order to pay less. Any advice help at all would be fantastic and very much appreciated.


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## cashinstinct (Apr 4, 2009)

Do you want to have a fixed rate or are you open to variable rates too?

Depending on the downpayment in %, the best rate will vary.

The lowest variable rate offered by brokers right now I saw is 1.80% (if you have less than 20% downpayment and deal is insured by CMHC).

The lowest fixed rate is probably 2.35% (by HSBC) for 5 year fixed mortgage.

Compared to 2.69%, it can make a substantial difference.

Do you have TFSA-RRSP (or RESP with children) equity (stock) investments too? You could consider balancing paying back mortgage Vs equity investments for the future.


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## m3s (Apr 3, 2010)

What's exceptional about 20%/20% pre payment options.. You sound like a glossy brochure. Are you a mortgage broker trying to drum up business for a sucker rate?

If not then find yourself a decent broker. In my experience they can find the best options for you quickly and a decent one knows the fine print and mine fields to avoid


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## steveh85 (Jan 11, 2017)

janimator0 said:


> 5yr fixed with a 25yr amortization with exceptional pre payment options of 20% lump sum per year and 20% increase of payments. Fully portable and I can chose any payment frequency I like. Rate is 2.69.
> 
> Would love to do my best to pay off everything as fast as possible in order to pay less. Any advice help at all would be fantastic and very much appreciated.


Read this article oemortgage.ca/mortgage-pre-approval-process-work


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## janimator0 (Mar 8, 2017)

m3s said:


> What's exceptional about 20%/20% pre payment options.. You sound like a glossy brochure. Are you a mortgage broker trying to drum up business for a sucker rate?
> 
> If not then find yourself a decent broker. In my experience they can find the best options for you quickly and a decent one knows the fine print and mine fields to avoid


I'm using a mortgage specialist. This is what he offered me


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## janimator0 (Mar 8, 2017)

cashinstinct said:


> Do you want to have a fixed rate or are you open to variable rates too?
> 
> Depending on the down payment in %, the best rate will vary.
> 
> ...


From what I've been hearing since the rates are very low it may be very beneficial to go with a long term fixed rate. I'm open to anything really. I've already put down 20% down payment. I'm first time home buyer and use my rrsp towards my new home.


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

Rate should not be your main concern. For the last decade, we have been sitting in an abnormal environment where our lending rates are outrageously low. Anything under 5% is considered extremely low, therefore 2.69%, 2.59% or even 3.09% is fantastic.

What you should be more concerned is the loan conditions and perks. 20/20 is a good start. What I find extremely important is penalty calculations. Is your broker placing you with a bank or a mono-line lender? Banks tend to have horrendous penalties should you (and you will) break your loan before the 5 years are up. 

The best advice I can give you is to stick with a mono-line lender, opt for a variable rate or a short term fixed rate and make sure there is no fine print. Don't fall for advertised low rates (such as the 2.35% with HSBC someone mentioned - once you look into it, you will realize it is almost unattainable) - there is always a catch to such ads.


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## m3s (Apr 3, 2010)

janimator0 said:


> From what I've been hearing since the rates are very low it may be very beneficial to go with a long term fixed rate. I'm open to anything really. I've already put down 20% down payment. I'm first time home buyer and use my rrsp towards my new home.


Seems to me you always pay a premium for the security of the longer term so it's beneficial to the lenders to push those. Rates would have to go up drastically to make it worthwhile. I've been using a blend of variable and 2 year fixed for a decade now and it has worked out very well for me (currently 2.19% 2 yr from last summer, had a record low 1.45 2 yr fixed before that..)

I've seen many colleagues pay $$$ penalties with the big banks so I second recommendations to avoid big banks like the plague. You need to know your rights in the fine print or have a broker who does or they will try to charge penalties even if the fine print protects you from them. I would also double check all the math because I've seen convenient errors (and pay the property tax yourself..)


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