# Help with negotiating best mortgage rate please



## Justin1980 (Feb 23, 2013)

Hey fella's,

Our situation:
- Bought our home for 230K five years ago.
- Mortgage up for renewal in November of this year, at which point we'll owe 180k.
- We have come into 55k extra that will be put onto our new mortgage, so will owe 125k.
- I've done lots of Reno's and have been appraised at 330k, but im thinking it's more like 300. The appraisal was just some internet thing mind you, no one came to our home. It was just VERY loosely based on our area, number of bedrooms etc.

I mention all that to ask you if any of that provides me negotiating power (the 55K).

My question is, does anyone have a write-up somewhere, or a link that shows / advises on how to negotiate the best possible (lowest) "percent above prime" that we can get?

I mean, going from bank to bank? ....what to say at each? ....transferring RRSPs to their bank in exchange for better rate?

Or is going with a mortgage broker the best idea? Any referrals? Im in Ottawa Ontario Canada.

Lots of questions, i know. Thank you in advance for any help, it's greatly appreciated! 

Justin


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## Mall Guy (Sep 14, 2011)

Just do your research . . . at some point in the meeting the issue of rate will come up . . . simply say "ING (or whoever) are offering 2.5% (or whatever), and that's their face rate, are you able to do better, by say .05% ?". Mortgages and credit cards, the two most profitable lines of business for the banks. Just know the numbers, bring proof, have a good story (like paying down $55K) and ask for a low enough rate that they have to "send it to head office for approval".


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## MRT (Apr 8, 2013)

Bringing over business, such as RRSPs, is unnecessary to secure the best mortgage rate from a lender. Mortgage units tend to be separate from retail banking divisions, and it makes little difference to a mortgage dept if you bring over investments or bank accounts to another division of the bank. 

The 55k means nothing, unfortunately. In theory, it actually detracts from the situation, as your mortgage amount will be lower and they earn less interest  

Easiest thing to do is call a broker and tell them you want the best variable rate they can arrange. 

Then double check that rate online, or with another broker or two. Really, the info is all available online at various sites that collect rate info from everyone, but it costs you nothing to deal with a broker since they are comp'd directly by the lender.

edit: before you go through the hassle of moving the mortgage, give your current lender the option to match whatever you find. It is infinitely less hassle to sign + date a renewal form than to go through the application process to transfer to another lender.


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## My Own Advisor (Sep 24, 2012)

@Justin,

I also live in Ottawa. If you want the name of the mortgage broker I/we used, he lives in Vancouver, I can email you his contact information.

[email protected]

Nothing to lose, since mortgage brokers work for you.

Cheers,
Mark


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## Rusty O'Toole (Feb 1, 2012)

I have found the best results from working with an independent mortgage broker. Your broker may deal with 50 financial institutions, all with different criteria and interest rates.

If you have lots of equity, a good property, good credit rating you can qualify anywhere so you can get the best deal. They can usually do better than their first offer.


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## Justin1980 (Feb 23, 2013)

Thanks everyone for the input and advice.

Mark, i will send you an email, thank you.

So quick question, on ING, it has for 5 year fixed, a 3.79%. Would you suspect brokers are able to get better numbers than those posted openly like that?
http://www.ingdirect.ca/en/mortgages/index.html


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## My Own Advisor (Sep 24, 2012)

Just wrote you back Justin. I suspect you could get less than 3.79% for 5-year fixed.


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## Koala (Jan 27, 2012)

I liked this broker's site, but decided to use someone in my province:
http://www.integratedmortgageplanners.com/mortgage-rate-guarantee

Looking at his rates, and where I went, you should be able to get under 3.5% pretty easily.


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## Justin1980 (Feb 23, 2013)

To start, thank you all.
On RBC, prime is listed at 3%. This means that the 2.99 is (as of today) impossible, correctÉ
I realize im asking for a lot of hypotheticals, but my goal would actually be to amoritize this over 10 years. Would love an under 3.5% over 10. If i get a broker, am i bound to what they can getÉ Or do they simply offer me what they are able to getÉ Leaving me free to accept, or shop around? Thank you all so much.


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## Spudd (Oct 11, 2011)

I locked in my 2.99 4-year mortgage while prime was 3%, so it is not impossible. But rates have been rising lately.


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## Just a Guy (Mar 27, 2012)

One thing I would do is ask for all their rates for 1-10 years. Often, some of the other years like 4 or 7 have better rates than 5. This is a little known, no so secret.


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## MRT (Apr 8, 2013)

Justin1980 said:


> To start, thank you all.
> On RBC, prime is listed at 3%. This means that the 2.99 is (as of today) impossible, correctÉ
> I realize im asking for a lot of hypotheticals, but my goal would actually be to amoritize this over 10 years. Would love an under 3.5% over 10. If i get a broker, am i bound to what they can getÉ Or do they simply offer me what they are able to getÉ Leaving me free to accept, or shop around? Thank you all so much.


The Prime rate, on which variable rates are based, has nothing to do with fixed rates. With some historical exceptions, all of the banks use the same prime rate, derived from the Bank of Canada's overnight rate. They will offer a discount or premium on that Prime rate, depending on market conditions. Fixed rates are related to bond yields.

You are free to shop around. NEVER sign a contract with a broker or lender, as it is 100% unnecessary while you are shopping around to find the best rate, until you are finalizing a deal.




Just a Guy said:


> One thing I would do is ask for all their rates for 1-10 years. Often, some of the other years like 4 or 7 have better rates than 5. This is a little known, no so secret.


typically the longer the term, the higher the rate. You pay a premium for the extra security you get from locking in over a longer term. It is *highly* unusual to find a 7-year rate that is lower than a 5-year. Naturally, it is often easier to find a lower 4-year vs. 5-year.


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