# Best Rate?



## Butters (Apr 20, 2012)

I just bought my first house. 250k, im putting 50k down
Pos Date is Aug 1st

I live in Winnipeg, Manitoba.

My mortgage broker found me a 2.99% deal at AGF for 4 year fixed

I looked online and Caisse financial is offering a 2.94% for 4 year fixed

Also, Assiniboine Credit Union has for 2.99%

I don't know much about Caisse, but I know Assiniboine Credit Union is strong

Which of these would you go with?

What are things to worry about? At the end of the 4 years, can they force you to pay money to go to a different company?

Would anyone recommend variable? I can't find any good rates out there
What about 5-10 year fixed?

On CJOB radio, they suggested the bank of Canada isn't going to change the rates for 2 years

Would it be wise to get a one year mortgage sometimes super low like 2.24%, and then lock in a rate a year later?
1 Year is always the lowest

I want to hear everyones responses 

- Young Kid


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## dougbos (Jun 4, 2012)

First, did you sign the deal to buy without your mortgage financing in place? One thing to look at before worrying about rates is the terms of a mortgage. Is a regular one or a collateral one? What is the annual lump sum payment and increasing your monthly payment like -10/10 or 20/20. Are you able to refinance during the term? Have you signed for the 2.99% yet. Did the agent go over all of the terms carefully and allow you to ask questions? 
With respect to rates at this point no one can accuarately predict what will happen with the Bank of Canada rate. This one directly affects the variable. The rate will rise, probably slowly and I cannot see it staying where it is for 2 more years (my opinion). With fixed rates there will be an increase also. You can get a 5 year fixed for maybe .05 higher than the quoted four year rate. You need to think about how secure your job is and the type of home that you are buying. Will you have to have money to put repairs into it. Don't overlook a 7 or 10 year term. You may be paying 1% higher but you will know what your payment will be for the next 10 years. As your income goes up you could use the extra money for alump sum payment or to increase your monthly payment.If you worry about money you might be best to get a good long term rate. If you are a gambler you could go with the variable and be able to lock in if the rates start to go up quickly. In the end it is you that has to be comfortable with the rate and the monthly payment. After you sign don't second guess your decision.


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## Butters (Apr 20, 2012)

I was pre approved 2 times in the past, my 4 month rate lock just expired haha, my credit score is great, my money in the bank is great

but, i was too lazy to renew it, so i just put financing condition on this offer, not expecting to get the house... i have until friday to clear it, my broker said it will be done thursday!
im not worried about that pre-approval
and i believe until friday, i always have the option of saying "i can't met my financing condition, i have to pull out"

and i understand i actually have until possession date, to find the best bank/rate, then im stuck 

like the AGF can serve as my guaranteed fallback option

I have not signed any mortgage papers,
Only the offer on the house.

job will be completely stable for 10 years, and i can re-asses then, im sure it will always be around

im not concerned about money too much, i am a super super cheap person, and just want the best rate haha

and wow, i just read that other post, 25 years instead of 30, i was planning on 25 anyways, but that should have a huge impact on bidding wars, but won't crash the market, just halt it 

thanks for the reply! the wages go up, and hopefully the mortgage doesn't, i like that 

my brother gave me a contact number for RBC, he said they fought hard to get his business, and to use his name as reference





*Edit, I feel as if the broker was getting a better commission from AGF, i told the broker i've never heard of AGF, i saw the 2.99% rate everywhere, felt like the broker didnt help me at all
Royal Bank straight up told me, they wanted my business and would match any rate out there, aka 2.94% 4yr fix
Royal Bank also said if you have multiple accounts with them, they also waive chequing fees, etc... they want all my business at one place
I will stick with PC for now, since its free, but something to look into later!

AGF told me today they wanted me to pay 250 dollars, to have someone check out to see if the house is worth at least 200k (what my mortgage would be) (even though its valued at 305k)
I told AGF and the broker, see ya later
gave RBC all my info, they said they'd have me approved for friday... easy

RBC could also get an appraiser, but i'd rather deal with a company that has a branch in my city! a real person to visit!

RBC also said since im putting 20% down, they would give me a line of credit at prime +.5% (prime is currently at 3)
3.5% lending, sounds awesome to me! (not that i ever hope to use that)'

Weird that RBC lost some points today, they seem like a killer bank!


I enjoy talking to myself though, thanks guys!!!! (not)


I still have until Aug 1st to decide my rate

variable????
fixed 4 year 2.94???
what would you do????


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## yycmortgageguy (May 29, 2012)

Read the small print and ask lots of questions if you are not comfortable. Also find out if there are fees apply to your mortgage, either now, during, or at renewal of your mortgage. There are a few lenders offering that rate special, so you still have options.

You need to ask if the 5 year term is right for you? Will you live in the property for 5 years, or move, relocate within that time? Most buyers usually get an "itch" around the 3 year mark historically, and you should also ask what your options are to be able to port the mortgage (move it to another property) within the 5 year term to avoid breaking the mortgage and incurring a penalty. If a 2, 3 or 4 year term better meets your goal or time with this property, then you should look at a different term.

Credit Unions are great, and may be a better option.

Variable is anybody's guess, and a few years ago most brokers recommended them above all other fixed terms. Now with rates so low, it is not the preferred choice since the spread is so little between fixed and variable. It still comes down to a personal choice and your tolerance to risk. You could also seek another opinion...


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## Butters (Apr 20, 2012)

Awesome reply!!! I will be sure to ask those questions!

I could live in the house for 4 years, or worst case if I lost my legs or my job, I could rent it out easy.

Royal Bank matched the 2.99% but weren't too thrilled about the 2.94% at 4 years, because prime is at 3, they don't want to lose too much money 

So maybe I should talk to Caisse and find out what "fine print" is in their mortgage rate

But Royal Bank is offering me that line of credit for prime +.5, my brother said its great, he did reno's to his basement, super low rate
And they mentioned if I made my chequings account with them, I'd have no fees

(which I'm already getting at presidents choice, but another thought for the future!)
I think PC's savings account is a little higher rate than Royal
PC 1.35% (must hold min 1k)
Royal 1.2%

Plus I'm just used to my PC, I know I can change my money to chequings in 24 hours(or less), I know how it all works, i am comfortable!

*Another question....*

2.99 4 year fixed 201,600 dollar loan

30 year bi weekly accelerated is 423.43
but a 25 yeah be weekly NON ACCEL is 439.57

the NON ACCEL is a higher price

But an interesting thing I heard, is that if I take a 30 year bi-weekly accelerated, it will pay my mortgage off in 24-25 years

So, It's cheaper per "bi-weekly" and pays off my house at the same time...

Apparently it hits the principle harder...

I was also planning to add a few hundred bucks here or there... pay it off even faster (which Royal bank allows between 100-423.43 per payment extra (double, min value 100)
and of course yearly anniversary payments

*Could anyone clarify that accelerated statement?*



***EDIT

Am I overlooking this?

bi-weekly is the same is "semi monthly"
24 pays
is this correct?

but biweekly is every 2 weeks (some months have 3)
26 pays

16.14 dollars x 24 = 387.36 of savings minus 2x423.43 (the 2 extra pays)

$459.50 more per year on 30 year biweekly accelerated vs semi monthly 25 year

or simply 423.43 x 24 = 10,162.32
439.57 x 26 = 11,428.82
difference of 1266.50 dollars

Am i doing something wrong


anyone else want to help me on calculations?

I don't mind paying around 450 a paycheque


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## Spudd (Oct 11, 2011)

Try this calculator:
http://www.vertex42.com/Calculators/Canadian-mortgage.html


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