# Who should I go to for my mortgage?



## gentlepuppies (Jan 17, 2016)

I just bought my very first home, a condo on assignment, and have to put $100K down, with a $280K principal remaining. I already got a mortgage approval with TD (variable closed @ Prime 2.70% minus 0.35%). Can I do better elsewhere? TrueNorth for example offers 1.98%, which will save me $5K in interest over 5 years - which doesn't seem like much now that I actually used a calculator. I was warned against brokerages, but anyone got a different opinion? FYI, I have a healthy steady income, and would like the flexibility to pay off big chunks of my mortgage periodically. Given my living expenses, if I save less than 10K a year on top of that and put the rest to the mortgage, it can be still be done in less than 10 years, though I probably won't be approved for that lol. I might also sell within 5 years to upgrade. FYI I'm 27, if that factors into anything.

I close with builder in 2 weeks, so is there even enough time to go elsewhere?


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## fretwire (Apr 13, 2016)

Just some reading for you on TD mortgages so you can make an informed decision before signing on the dotted line:

http://www.canadianmortgagetrends.com/canadian_mortgage_trends/2011/12/collateral-charge.html

http://www.canadianmortgagetrends.c...-takes-heat-for-its-collateral-mortgages.html

The information is fairly old but I'm pretty sure it still applies.


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## gentlepuppies (Jan 17, 2016)

I skimmed the above and it doesn't look like something that would affect me (correct me if I'm wrong), since I have no other debt and no need for anything other than the regular...?


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## fretwire (Apr 13, 2016)

The big one is if you ever decide to move your mortgage to another institution there could be significant fees associated with the move.

There's other impacts (and benefits) but the difficulty in moving your mortgage at renewal time is probably one of the bigger drawbacks.


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## chantl01 (Mar 17, 2011)

I don't know who warned your against mortgage brokers but whoever it is did you a disservice. I would never sign a mortgage agreement without having gone through a broker. Brokers can shop around for the best mortgage to suit your needs - they aren't like the bank reps that are trying to sell you whichever product will earn the most revenue for the bank. I've regularly had a broker obtain a better mortgage rate from the bank holding my expiring mortgage than what I could possibly negotiate directly with the bank rep. Best of both worlds - don't need to change institutions but end up with a better rate (and this is even after the bank pays the mortgage broker commission, telling you how much of a rip-off the rates are that they offer to individuals renewing mortgages).


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## dougboswell (Oct 25, 2010)

TD registers its mortgages as collaterals. Were you told this? Usually 10 business days are needed by some lenders so your time line is probably against you. Going through a mortgage broker allows them to find the lowest rate for you that best fits your requirements. Banks love you to sign on the bottom line. Look at their yearly profits.

It is unfortunate that an extra $5000 is going into their bottom line instead of staying in your pocket.


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## gentlepuppies (Jan 17, 2016)

At this point, I don't have time to study alternatives in terms of broad generalities. I need specific numbers. One coworker suggest that my mortgage should come from a different bank than my regular banking, for better leverage (right now everything is with TD), but he seems to think 2.35% for 5 years is pretty good, so maybe I'm already reaping benefits from customer loyalty? Anyone with TD with a different rate?


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

You should maybe stay away from brokerage firms who will physically lend you the money - but I would not stay away from mortgage brokers altogether. True North can probably get you 1.98% with TD. The broker will research the best mortgage product, rate and lender best suited for your needs. Mono-line lenders are great as well. Research First National - they are the top non-bank lender in Canada. Its a little known yet surprising fact. To access them, or any other such as Mcap, HomeTrust, Street Capital etc, you will need a mortgage broker to assist you.

Stay away from banks if you are going fixed. Their penalty calculations are horrendous. They also register collateral mortgages which cannot be switched for free to other lenders. 

As for rates, I advise you go variable or even better, seek a 2 year term since they are the lowest offered at this time. If your condo will not be built in the next 120 days, probably doesn't matter the rate you choose now since it will change by the time you close the deal.


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## gentlepuppies (Jan 17, 2016)

Condo is already complete and will register within a couple months. Can't I just skip the broker part, go to TD directly and ask them for say 2.1%?


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

you can try but highly unlikely you will get it. Banks run their broker channel completely separate. Rates and products can be different from each other. If you don't want to deal with a broker, do lots of research and choose a mortgage that best suits your needs. Its not always about the lowest rate. The product you are getting is much more important and can save you thousands more than a simple spread of 20 - 30 bps.


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## gentlepuppies (Jan 17, 2016)

Right now, True North is offering 2.1% for a 5 year variable closed, vs 2.35% from TD for the same. The terms for True North actually seem better given the "collateral charge" issue with TD. Is that the best rate I can get from TD? Time isn't exactly on my side, and I plan to commit to something within 24-48 hours, research be damned lol.


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## dougboswell (Oct 25, 2010)

fretwire said:


> Just some reading for you on TD mortgages so you can make an informed decision before signing on the dotted line:
> 
> http://www.canadianmortgagetrends.com/canadian_mortgage_trends/2011/12/collateral-charge.html
> 
> ...


Still applicable


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## dougboswell (Oct 25, 2010)

Another option is to go with a 6 month open mortgage. The rate is a little higher but buys you time to do your research and get the best rate and best mortgage for yourself. You can pay it off anytime without a penalty.


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## My Own Advisor (Sep 24, 2012)

I would see if TD will negotiate based on True North rates.

Just make sure with your variable mortgage, TD or True North offers flexibility in prepayment privileges. Confirming IRD of only 3 months, if you decide to break the mortgage, needs to be confirmed as well.
http://www.myownadvisor.ca/mortgage-tips-homeowners-ages/

Historically speaking, your rate with TD is still very good.


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## RentGera (Apr 28, 2016)

Definitely try a few brokerages, it never hurts to get more quotes. I always found the lowest rates though brokers and never had any issues with them.


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

gentlepuppies said:


> Right now, True North is offering 2.1% for a 5 year variable closed, vs 2.35% from TD for the same. The terms for True North actually seem better given the "collateral charge" issue with TD. Is that the best rate I can get from TD? Time isn't exactly on my side, and I plan to commit to something within 24-48 hours, research be damned lol.


Find out from True North who is offering that rate and what the criteria are for that mortgage. Sometimes low rates come with loan restrictions and stripped of all benefits. Get informed before you sign.


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## redsgomarching (Mar 6, 2016)

Big banks will not price vs private lenders or mortgage brokers only those who are their direct competition (schedule I banks). 
Secondly, be careful, as I have lost customers to mortgage brokers who chase rates but end up paying broker fees and lose out on particular features of mtgs that can be beneficial (20-20 etc, mtg cash account etc).

Just because on the outside it has a flashy low rate it doesn't mean it is your best option.


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## dougboswell (Oct 25, 2010)

redsgomarching said:


> Big banks will not price vs private lenders or mortgage brokers only those who are their direct competition (schedule I banks).
> Secondly, be careful, as I have lost customers to mortgage brokers who chase rates but end up paying broker fees and lose out on particular features of mtgs that can be beneficial (20-20 etc, mtg cash account etc).
> 
> Just because on the outside it has a flashy low rate it doesn't mean it is your best option.


Consumers who qualify for A credit lenders will not pay broker fees. They may be found with B lenders and definitely if it is a private mortgage. 
If a customer is looking at a "flashly" rate there is nothing wrong with putting cash back in their pocket. All features would be disclosed upfront and certainly in the disclosure papers that they would sign. If a customer is happy with a 15-15 prepayment as opposed to a 20/20 then all the better for them.


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## gentlepuppies (Jan 17, 2016)

I went back to TD with True North's 2.25% (2.1% doesn't apply to assignments). TD says they can't match private brokers, but submitted a request for 2.3% for me for 5 year closed variable, and another request for 2.1% for a 2-year fixed.

Again I don't need to hear about the theory lol, can someone simply tell me if this is the best I can get? Is anyone getting better elsewhere? Would you do the 2 year or 5 year, given the above rates? I don't think it'll matter to me whether I can prepay 15% or 20% each year (doubt I'll have that extra dough for the next few years anyway). I'll most likely prepay 5-10% per year.


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## My Own Advisor (Sep 24, 2012)

I think anything around 2.1% with prepayment options is great.
http://www.ratehub.ca/best-mortgage-rates/5-year/variable


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

gentlepuppies said:


> I went back to TD with True North's 2.25% (2.1% doesn't apply to assignments). TD says they can't match private brokers, but submitted a request for 2.3% for me for 5 year closed variable, and another request for 2.1% for a 2-year fixed.
> 
> Again I don't need to hear about the theory lol, can someone simply tell me if this is the best I can get? Is anyone getting better elsewhere? Would you do the 2 year or 5 year, given the above rates? I don't think it'll matter to me whether I can prepay 15% or 20% each year (doubt I'll have that extra dough for the next few years anyway). I'll most likely prepay 5-10% per year.


If rates are your priority, shop enough and you will find a better rate but will most likely be stripped of all benefits. What you save in rate, you will pay in privileges. Personally, I value the benefits more than the rate. A good balance is optimal.

20bps make no difference. If TD is the lender you want to stick with, then accept their offer because they are within the norm. If you want even lower, opt for a 2 year fixed. But again, we're talking small bps difference and has no real impact.

Mortgage brokers have the ability to buy-down the rates through their commissioned kick-back so the search for the lowest rate possible is endless.


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## djkelly (Feb 18, 2016)

If you feel like you don't have time to make an informed decision then sign up for a new mortgage with your current lender using an open mortgage. The rate will be a little higher for the next couple weeks or months until you make a decision and want to lock in for a longer time period, but it will buy you time to make the best possible decision.


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## gentlepuppies (Jan 17, 2016)

So I keep hearing that *TD only does collateral charge mortgages*, but in the email I got from my TD person clarifying terms/conditions specifically says "standard charge". Is it a lie? If not, screw everything, I'm doing all my business with one bank instead. 

Just a recap, here's all my options:

5 year variable closed
TD: 2.3%
True North: 2.25%

2 year fixed
TD: 2.2%
True North: 2.09%
RBC: 2.149%

Every 0.1% difference is about $1300 in interest over 5 years

I plan to live in it for at least 1 year, but the possibility is there that I might sell before 5 years is up, not sure if that would make a particular option more favourable

Edit: Anyone heard of Sigma Mortgage? They offer 5 year variable closed @ 2.01%??


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

Collateral or not, I would not be too concerned. Collateral mortgages are usually registered when mortgage is a HELOC. Industry is changing and more and more are going to a collateral charge for all mortgages. So to answer your question, it is very possible that they will register a standard charge if that's what they confirmed to you.

Back to my original point, you're chasing the lowest rate but in my opinion, you should be chasing the best mortgage benefits since you are already planning to make a change within 1 years time. Penalty fees are astronomical when the banks calculate it. 

Sigma Mortgage is simply another brokerage house, similar to True North. They are a group of brokers who will place you with a regular lender. Same thing with True North - don't go thinking you will end up with a 'True North' mortgage....To compare apples with apples, find out which lender True North is placing you with. Then you can properly assess.
Don't fall for advertised rates from brokerage firms. They always pitch low rates which very few people can benefit from. Once they have your attention, they up-sell you to rates which everyone else offers.

Since you are planning to make a change after 1 year, your best option is a variable rate (with any lender) because when you break that mortgage, penalty is a standard 3 month interest. If you can 'time' your move (highly unlikely), opt for a 1 year or 2 year fixed. Rate will be slightly lower but penalty can be higher should you break it at the wrong moment.


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## dougboswell (Oct 25, 2010)

gentlepuppies said:


> So I keep hearing that *TD only does collateral charge mortgages*, but in the email I got from my TD person clarifying terms/conditions specifically says "standard charge". Is it a lie? If not, screw everything, I'm doing all my business with one bank instead.
> 
> Just a recap, here's all my options:
> 
> ...


Here is a link re TD and collateral mortgages. http://www.canadianmortgagetrends.c...-takes-heat-for-its-collateral-mortgages.html

I have dealt with TD twice for personal mortgages. In both cases the persons we were dealing with were not licensed mortgage agents. 

I would ask the person you are dealing with to forward a copy of the charge form that will be used at signing and determine yourself the status of the registration of the mortgage. Just because something is put in an email does not mean that is what you will be signing for.


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## gentlepuppies (Jan 17, 2016)

Yeah I asked him, and he corrected himself saying that it is a collateral charge mortgage. That's should be a dealbreaker unless I can get a rate that will save me at least $1k in interest a year (assuming I might sell/transfer mortgage elsewhere within 1-2 years), right?


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## OhGreatGuru (May 24, 2009)

2 weeks from closing seems a bit late to be mortgage shopping. Stick with the commitment you have, or you are liable to screw up something in the deal. Most "closed" mortgages allow 5-10% principal repayments on the anniversary date. If your mortgage has that feature, that's a good way to save money in the long run.


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## dalebreton (Apr 14, 2020)

I also took a loan when I bought my house. I remember I took it from a private bank and I didn't have any issues with that. Actually, I didn't analyze all the details and aspects before taking the loan. I remember, a friend suggested applying for the loan on Fokuslån Login ® Lån fra 10000 kr op til 150000 kr ᐈ Min konto | Credit-10, because he used their services a couple of times. So, I followed his advice. I took a loan for business and I got an interest rate of 8,90%. Now, I am still paying it back, but the most important is that with the money received I set up my own business.


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## STech (Jun 7, 2016)

gentlepuppies said:


> I was warned against brokerages, but anyone got a different opinion?


Whoever gave you that advice is extremely misinformed, and you should avoid consulting them in any further financial matters. Mortgage brokers are licensed and insured, and regulated much harder than a bank rep who only gets a bit of sales training. Bank reps cannot call themselves mortgage agents or brokers because they aren't licensed, and hence call themselves advisors or the like. 

Mortgage brokers offer lower rates, and more importantly professional advice, at no cost to you, and often will place you in a better product with the same bank that didn't offer you the best deal. If your credit profile is really bad, or require a very special type of mortgage, then they might charge a fee for the services, but those cases aren't the norm, or applicable in your case. Long story short, whoever warned you against brokers, is very ill informed, or works for a bank. 

Don't be blinded by 0.1% difference in interest rates. There's quite a bit more to saving money on a mortgage than just the interest rate. My biggest question to you, is why the plan to move just after a 1 year or 2? Real estate acquisition costs are very high, and you'll lose a fair bit by hopping from place to place. The days of condo flipping, or AirBnb large profits on downtown condos are very likely behind us.


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## Money172375 (Jun 29, 2018)

Brokers will bash Banks.....then they place 85% of their business at the BiG 5.

brokers will get you a better rate for one reason.....they have control over their own compensation. Most Retail bank staff are only permitted to discount within a certain range, while a broker can discount a deal down to where he/she makes $0 commission. Brokers will also hype up their “expertise”. Don’t be fooled into that general statement. You’re looking for an experienced Person to deal with (if your situation is complex). I’d rather work with a retail branch advisor with 10 years of experience than a broker with 2 years experience.

I worked in TD branches for 20 years and was a TD mortgage specialists for the last part of my career. I’d personally use a broker since they do all the price shopping for you. I do however see the “comfort” in using a branch advisor if it’s someone you know and trust vs. Working with a complete stranger.

brokers also have the stereotype of “bending“ rules....which can be useful to some borrowers.


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## fireseeker (Jul 24, 2017)

Note that the OP does not appear to have posted here in years.
Also note that the thread was revived by a spammer. 
Maybe it's best not to jump in ...


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## Money172375 (Jun 29, 2018)

fireseeker said:


> Note that the OP does not appear to have posted here in years.
> Also note that the thread was revived by a spammer.
> Maybe it's best not to jump in ...


haha. New to forums....didn’t even know this was a thing.


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## STech (Jun 7, 2016)

fireseeker said:


> Note that the OP does not appear to have posted here in years.
> Also note that the thread was revived by a spammer.
> Maybe it's best not to jump in ...


Oops, I missed that too. Good info in the thread anyways. I was hoping he/she would post why they wanted to move out so soon after buying. Maybe they'll check in and update on how they made out after all.


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## Bobcajun (May 15, 2018)

Thought I would use this thread for a similar question. I have never had a mortgage. Have no idea about how to get one. I probably have top credit rating. The question is whether to use an online mortgage broker, who could be anywhere, or use a local broker (Montreal)? Any suggestions on which would be a good one?
thanks bob


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