# 2.99% Heloc



## marina628 (Dec 14, 2010)

Hey Guys
Just got back from my bank and locked in the rate on my HELOC for 4 year @ 2.99%.My lady at TD said they are matching all offers by BMO which seem to be the lowest this week.


Marina


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## Jungle (Feb 17, 2010)

Yes right, TD, CIBC, BNS and RY are offering 2.99% four year, fixed mortgage terms, to compete with BMO's 2.99% 5 year, fixed term. 

I don't expect this to last long as bond yields are going up, so long as this stock market continues to hold or rally.


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## marina628 (Dec 14, 2010)

Yes she said currently has exp date Feb 1 but that can change.


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## Four Pillars (Apr 5, 2009)

But variable is always cheaper!! Lol.

2.99 is amazing. I got my first mortgage at the end of 99 and it was 6.75%. Seemed fine at the time...


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## Jungle (Feb 17, 2010)

Variable was good up until 6 months ago. 

We are SO close to early renewal with Scotia. We have two mortgages we can early renew without penalty in March. The rates on these mortgages are horrible; 5-5.5%! 

I doubt Scotia will hold this rate for another 1.5 months. 

However I can get a rate hold at BMO for 60 days... but I don't like their mortgage, it's fully restrictive. No moving, no pre-payment options, etc. 

Hmmm


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## andrewf (Mar 1, 2010)

Fixed rate HELOC? How does that work? Or did you transfer your HELOC balance to a fixed rate mortgage?


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## marina628 (Dec 14, 2010)

I increased my heloc ,maxed it out and then the Bank employee fixed the full amount to 2.99% for 4 years.We put the money back on heloc,she had to max it to go through the computer process ,it is not a mortgage.


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## Causalien (Apr 4, 2009)

Doesn't look like it's something they'd do normally. Do us mortals have to pay something? Or it is only available to the super rich?


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## Jungle (Feb 17, 2010)

Marina is vvvip.


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## marina628 (Dec 14, 2010)

HA funny I don't think it is anything special ,she said it is 1.8% off posted rate though.


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## buaya (Jan 7, 2011)

Jungle said:


> Variable was good up until 6 months ago.
> 
> We are SO close to early renewal with Scotia. We have two mortgages we can early renew without penalty in March. The rates on these mortgages are horrible; 5-5.5%!


As I mention on another thread we moved a mortgage over to Scotia for a variable rate of 2.15% (8.5 below prime) at end of October 2011. 
No fixed rate even today can beat that.


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## marina628 (Dec 14, 2010)

I have been doing variable for about 15 years but we are going to have our mortgages paid off in next 5-7 years so rather lock it all in for the home stretch.Our rental properties have to be fixed as our bank won't give us variable rates on them.


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## andrewf (Mar 1, 2010)

Marina, it's like a 4 year open fixed rate mortgage (repay at any time) at a fixed closed mortgage rate. Good work. It give you optionality. I guess they don't have to worry about you paying it off early because it is nigh on impossible for rates to get any lower.

I'm not sure any joe can go in and ask for a similar deal.


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## Causalien (Apr 4, 2009)

Marina, 

I asked my RBC contact and she confirmed they don't offer anything similar and that her husband in TD said they don't have anything like that. I will be at TD Monday demanding this. So can you give me some details. Like a name forthe plan or what the procedure is called? Hopefully my lowly mortal level acct is high enough up there to have this.


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## marina628 (Dec 14, 2010)

Actually it is not for 'every Joe' , My sister in law went into our branch today to see if she could get it and they were told it is something the system sends out to customers who make a certain criteria .They did not specify what criteria it was ,sorry I assumed it was for everyone .Also you cannot repay at anytime , you can double payments and prepay 15% a year .If you pay it out early there is a penalty but with the rates fixed so low I am ok with this term.I have set it up so it will be paid off in 4 years ,using it to buy a vacation home.


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## andrewf (Mar 1, 2010)

Well, not being able to repay it in full at any time makes it sound indistinguishable from a mortgage, to me.


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## leoc2 (Dec 28, 2010)

Marina have you considered the impact of US estate taxes on your vacation property? Can someone comment on US estate taxes with regards to holding US ETFs like VTI?
Thanks


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## marina628 (Dec 14, 2010)

We are buying the house for long term use ,paying cash for it and using equity from our PR. As for estate taxes our daughter is going on title with us as we plan to keep this home 20-30 years.It is large enough for extended family and we hope to have many years enjoying it .Andrew that was my thought as well but the 15% and double payment is more than we plan to pay anyway so not my concern.I have a 5.49% mortgage on one of my other properties that we are focusing on over this one .


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## Causalien (Apr 4, 2009)

So I donned my battle suit and went to TD to do war. I found the details of this TD offering.

HELOC of Prime + 1% variable rate. If you are potentially a good customer with more account types, it's prime +0.5%. If you are a large customer with a lot of transactions and brings in a lot of clients as well, you get prime +0.25%

That's for the variable part. At any one point you want, you can decide to lock down the rate and the amount you borrowed into a fixed rate. At that point, it follows the normal mortgage amortization. Hence the 2.99% 4 year term and the ability to pay down 15% in principal every year. You will be able to pay off the whole amount with a penalty based on the differentials between the locked in rate and the variable rate at that time multiplied by the time left.

Yes, it is available to mere mortals and yes, even the super rich will follow the same rule.


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## houska (Feb 6, 2010)

Causalien said:


> I found the details of this TD offering.
> 
> HELOC of Prime + 1% variable rate. If you are potentially a good customer with more account types, it's prime +0.5%. If you are a large customer with a lot of transactions and brings in a lot of clients as well, you get prime +0.25%
> 
> ...


This is very similar to ScotiaBank STEP. (I did not pressure them on reducing the P+1 HELOC part since my other business has to remain elsewhere)

Am somewhat surprised on the payoff penalty - I thought if you pay off a closed mortgage the penalty is usually the greater or a) 3 months interest, or b) differential based on the rate of your mortgage and the then-in-effect lower rate for a comparable fixed rate mortgage. Since rates are now very low, that would pragmatically probably mean a) is the penalty. I don't see what the then-in-effect variable rate would have to do with it. But maybe I'm just being dense....


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## Causalien (Apr 4, 2009)

houska, 

You might be right. I did not inquire and think too deeply on the penalty. I got the general impression that it is the difference between whatever loss the bank will have to take due to the rate at the moment of dissolving. 

I will ask for the details on dissolution on my next visit if I decide to use TD as well as the exact condition (and clauses in the contract) in which they will pull the loan from underneath my feet when the economy goes sour.


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## marina628 (Dec 14, 2010)

I plan to pay mine off at end of 4 year term and there is no penalty for that , did not inquire on anything else as it did not matter to me.


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