# Mortgage up for renewal



## faline (Feb 10, 2011)

My mortgage is up Feb 1 and is currently 3.75%
I'm kicking myself for not initially going variable.
My TD bank just emailed me wanting to set up an appointment about renewing my mortgage.
I said I want to go variable and she said I can switch to variable right away.
Before I talk to my TD rep I'm hoping for some advice from my fellow Canadians.. I don't have much experience or smarts when it comes to mortgages.
Thanks in advance


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## heyjude (May 16, 2009)

See what TD is offering, and then go to a mortgage broker.


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## My Own Advisor (Sep 24, 2012)

heyjude said:


> See what TD is offering, and then go to a mortgage broker.


+1


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## OurBigFatWallet (Jan 20, 2014)

I have two mortgages up for renewal later this year. Im gonna go variable on both. The rates right now are very low and there's enough room in the monthly budget to handle an interest rate increase. TD's initial offer will be quite high, and they'll be willing to negotiate somewhat but not with the rock-bottom rates you can find elsewhere. A mortgage broker will be able to get you a better deal, the big banks only match each other and their rates tend to be higher


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## My Own Advisor (Sep 24, 2012)

I would think if you find a good mortgage broker, they could get you something close to 2% for a 5-year variable with 20/20 prepayment privileges. That would be very good IMO.


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## faline (Feb 10, 2011)

Thanks, all!
My Own Advisor: I see you are in Ottawa as well.. do you have a broker to recommend?


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## My Own Advisor (Sep 24, 2012)

Well, I have a good rapport with intelliMortgage but I've heard locally Mortgage Brokers Ottawa are good to work with as well (haven't used them directly myself).


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## Davis (Nov 11, 2014)

I was in the mortgage market for about 17 years, and have been out for five or six. The only mistakes I made during that time was when I locked in. I thought my first mortgage was a great deal at 9.5% of a five year term. I ended up buying out of that after two years. I later locked in for a two year term because "rates were definitely going up". That was a mistake too. If I were shopping now, I'd get a variable or six month, and set the payment to be the same as for a five-year mortgage, so the difference is going against principle. Good luck.


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## secretly.lazy (Sep 17, 2015)

faline said:


> My mortgage is up Feb 1 and is currently 3.75%
> I'm kicking myself for not initially going variable.
> My TD bank just emailed me wanting to set up an appointment about renewing my mortgage.
> I said I want to go variable and she said I can switch to variable right away.
> ...


Mortgage brokers and banks can show you a chart that shows that in the last 30-40 years. From what I remember, variable rates have been higher than fixed rates for only a brief period of 1 year in the early 90s (if my memory serves me correct).

Here's a link that shows your the last 10 year history of fixed vs variable.

http://www.ratehub.ca/variable-or-fixed-mortgage


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

I work in the industry as a lender and cater to the mortgage broker channel. My recommendation would be definitely to go variable. Right now, you can get as low as prime minus 0.70%. Some are at minus 0.75% but may come with certain restrictions so beware. If you do go variable, I would say to stick with TD cause they will definitely match it, rather than go through the hassle of changing lender. If not, seek a mortgage broker to go with a mono-line lender. If you for some reason want a fixed rate again, stay away from the banks because their penalty calculations are absurd should you break your term. There are some good short term rates out there but all in all, you can't go wrong with variable.


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## dougboswell (Oct 25, 2010)

faline said:


> My mortgage is up Feb 1 and is currently 3.75%
> I'm kicking myself for not initially going variable.
> My TD bank just emailed me wanting to set up an appointment about renewing my mortgage.
> I said I want to go variable and she said I can switch to variable right away.
> ...


You are still 4 months out from your renewal date. You will not get most lenders to commit this far out although TD will. Of course your bank is willing to talk to you now because they want to lock you in now. The variable rate, my opinion only, probably will not rise further this year. That being said several lenders have raised their variable rate by 10 points this past week. It would interesting for you to post here what TD is offering you. Agents here can tell you if it is a fair offer or not. Do not sign until you have a better idea of what good rates are.


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## faline (Feb 10, 2011)

Thanks again for the feedback. Thought I'd let you know what I was offered:

5 year Closed variable, Prime -0.65% (so today my rate is 2.05%).

They let me renew my mortgage 4 months early too, no fees.


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## OurBigFatWallet (Jan 20, 2014)

Have you considered making a counter offer? I have a mortgage renewing in December and the bank originally offered 2.20% (5 year variable) but after negotiating they came down to 1.90%


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## My Own Advisor (Sep 24, 2012)

5 year closed variable, Prime -0.65% is good. 

I think you should be able to get 2% or 1.95% (Prime - 0.75%) with some extra effort. Talk to a mortgage broker and see if they can get one of the big banks to get you this deal.

@BigFatWallet - that is a killer deal 1.90%. Is that with a HELOC as well? 20/20 prepayment options?


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## OurBigFatWallet (Jan 20, 2014)

My Own Advisor said:


> 5 year closed variable, Prime -0.65% is good.
> 
> I think you should be able to get 2% or 1.95% (Prime - 0.75%) with some extra effort. Talk to a mortgage broker and see if they can get one of the big banks to get you this deal.
> 
> @BigFatWallet - that is a killer deal 1.90%. Is that with a HELOC as well? 20/20 prepayment options?


Not a heloc but it does have standard prepayment options (20/20). The penalty calculation is a bit weird which is likely why. It's calculated as the outstanding balance divided by 4 multiplied by the current prime rate. Works out to slightly more than the standard 3 months interest penalty but worth it for me. The lowest rate (1.85%) came with a 3% penalty so I avoided it


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

faline said:


> Thanks again for the feedback. Thought I'd let you know what I was offered:
> 
> 5 year Closed variable, Prime -0.65% (so today my rate is 2.05%).
> 
> They let me renew my mortgage 4 months early too, no fees.


Take it and run! The variable rates have just gone up this week to prime minus 0.50%. My hunch is banks are preparing for rate increases in the near future. They are closing the gap between variable and fixed steering consumers to lock into a fixed rate. I am still a believer of variable rates nonetheless.
So lock in your renewal - 4 months is right since industry standard will guarantee you a rate for 120 days.


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## Terminator (Dec 17, 2014)

I'm in a similar situation with my renewal coming up as well. This is my first mortgage renewal and admittedly, I'm not very knowledgable when it comes to rates, options, etc. My first term was a 5 year fixed, but I'm thinking about changing from fixed to variable. I'm just nervous with rates so low, I would get bit within 5 years going variable (I realize that's the price you pay for going variable...risk vs reward)

My lender initially offered me another 5 year fixed at 2.74%, but I told her I will be contacting a mortgage broker to compare offers. She warned me about using lenders that aren't the big banks. Is there any real problems with using a smaller company? Other than having a physical bank, I'm not sure what the big deal would be. 

If anyone has opinions to shine my way, I would love to hear them!


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

Terminator, 2.74% is not a very good rate. A good rate available right now is 2.59% - 2.64% so if you are planning to go fixed, tell your lender to call you when they get serious.

The problem against mono-line or non-bank lenders? None. In fact, there are more benefits than the banks since they are the ones the banks need to compete with. In fact, the big banks actually invest a bulk of their money with these 'other' lenders and I can assure you, they will not buy junk. Banks don't care about lending money to consumers since they make no money on that. They offer mortgages simply as a service in hopes to get you to open an investment account.

The benefits to the 'other' lenders is they tend to post the lowest rate possible. What you see is what you get. This is crucial since it will determine you penalty should you break your term - and trust me, 80% of clients do. Consumers have it wrong when it comes to mortgages where they focus on the lowest rate rather than their opting out options.
So since the bank post a rate closer to the 5% but in turn give you 2.74%, well they consider they gave you a bonus for the difference so when you do break you mortgage, you owe them the current rate differential PLUS the 'bonus'. See how nice they are?? Also, mono-line lenders usually have higher paydown options - up to 25% vs 15% for the banks.

I highly suggest you contact a mortgage broker - they will steer you to the right lender for your specific needs. If you want to stick with your bank, I strongly advise a variable rate - penalty is a flat 3 mth interest. Currently you can easily get prime minus 0.50% which today equals to 2.20%. Don't be afraid of rate hikes - they will not skyrocket for several years to come. Yes they may go up.....but don't expect a 5% jump. They've been talking about a rate hike for the last 5 years and they went down instead. Think about all the people who hurried up to lock in a fixed rate (in the 4% range back then) vs the variable rate which was half that?


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## gt_23 (Jan 18, 2014)

Mortgage u/w said:


> The problem against mono-line or non-bank lenders? None. /QUOTE]
> 
> Tell that to the clients of the former xceed mortgage or wells.


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## My Own Advisor (Sep 24, 2012)

Echo this...I highly suggest you contact a mortgage broker.

I was able to secure 1.95% with 20/20 prepayment options. There is no reason why you shouldn't get prime - 0.50%.


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

gt_23 said:


> Mortgage u/w said:
> 
> 
> > The problem against mono-line or non-bank lenders? None. /QUOTE]
> ...


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## lost in space (Aug 31, 2015)

Some good advice here

http://canadianmoneyforum.com/showthread.php/52977-Mortgage-advice-for-a-friend


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## coghlan (Nov 8, 2009)

Is CIBC about as good as any for a new mortgage with adjustable HELOC?

I had started talking to a mortgage broker but got tired of e-mail tag. I am just over 2 months away from renewing, but am getting the impression that unless you need money next week, they (at least this one) isn't in a rush.


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## HaroldCrump (Jun 10, 2009)

coghlan said:


> I had started talking to a mortgage broker but got tired of e-mail tag. I am just over 2 months away from renewing, but am getting the impression that unless you need money next week, they (at least this one) isn't in a rush.


Leave them a voice mail saying you have secured financing from another source, so please stop working on our case.
Then sit back and watch how fast they call you back...


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

coghlan said:


> Is CIBC about as good as any for a new mortgage with adjustable HELOC?
> 
> I had started talking to a mortgage broker but got tired of e-mail tag. I am just over 2 months away from renewing, but am getting the impression that unless you need money next week, they (at least this one) isn't in a rush.


You are either dealing with a small/rookie broker or simply asking the wrong questions. 

Look for a reputable broker, one who is well known and deals high volumes. You can ask this straight out - if he/she closes less than $20 million per year, find another broker - unless this one was referred by a trusted source.

If your calling a broker and just questioning the best rate, then most brokers know your just a shopper and will use his best rate to compete with someone else (bank). This is the wrong question to ask.
Rather, ask specifics. What do you really need? Do you have a particular income situation? Unique home? Need a unique mortgage product? Are terms, conditions and penalties a concern? If the rate is all you want, then see what the best rate is online and use that to negotiate with your bank - if you do not mind staying with CIBC.


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## coghlan (Nov 8, 2009)

Don't think that's the case.

I told him I want 80% financing w/auto-balancing HELOC in Jan. Didn't even mention rates.

Later, I asked more specific questions such as if he saw a problem meeting my requirements and whether he could provide a timeline to get this done.


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

Then you're dealing with an incompetent broker. 

If you're happy with CIBC product, just stick with them - especially if you do all your banking with them.


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## emmaj855 (Aug 31, 2015)

faline said:


> Thanks, all!
> My Own Advisor: I see you are in Ottawa as well.. do you have a broker to recommend?


Heard good about some of these , - True North Mortgage, Super Brokers, Brevity Capital . Check if these are available for your location.


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## Jon202 (Apr 14, 2009)

Does anyone have any up to date Variable rate prime discounts from the Big 5? I've been Variable for nearly 2 decades and this is the worst offer for renewal I've seen so far, -.3%. A few hundredths of a percent aren't gonna break my bank (or theirs!) but curious if anyone is willing to share their VRM rate recently. 

thx.


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## Just a Guy (Mar 27, 2012)

I'd point out that the prime rate is the lowest it's ever been in that time period as well. As you approach zero, there's less and less room to cut.


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## crr243 (Nov 2, 2015)

Jon202 said:


> Does anyone have any up to date Variable rate prime discounts from the Big 5? I've been Variable for nearly 2 decades and this is the worst offer for renewal I've seen so far, -.3%. A few hundredths of a percent aren't gonna break my bank (or theirs!) but curious if anyone is willing to share their VRM rate recently.
> 
> thx.


I met with TD in-branch on November 25th. The rate quoted was p-0.4.

I got a phone call from TD on December 2nd. The rate quoted was p-0.35.

I spoke with a TD Mortgage Specialist pm December 4th, thinking he might be able to do better than the TD branch or the phone guy who didn't know the difference between a conventional and collateral mortgage. The Mortgage Specialist said he can't help with renewals, but the best he can do for new clients is p-0.35. He also said that 2 months ago, TD was offering p-0.7.

The discount is getting smaller. 

I'm in the same position. I'm debating whether I early renew now at p-0.35, hope it gets better in the next 3 months, or apply at another lender to get a rate guarantee and pay all the fees (TD is collateral...) to jump ship at term end.


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## My Own Advisor (Sep 24, 2012)

That's what I found as well. Early fall, you could get P-0.70, so 2% with 20/20 privileges. That was a great deal.

Now, P-0.50 is a good deal.

FWIW, we're starting our new term this weekend at P-0.75% (1.95%).


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## crr243 (Nov 2, 2015)

My Own Advisor said:


> That's what I found as well. Early fall, you could get P-0.70, so 2% with 20/20 privileges. That was a great deal.
> 
> Now, P-0.50 is a good deal.
> 
> FWIW, we're starting our new term this weekend at P-0.75% (1.95%).


Consider me jealous.


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

Prime minus 0.30% seems to be the standard today. The discount has fallen considerably the last couple of weeks. For those renewing, I know it sucks knowing the discount was double that not long ago, but, consider that variable rates are still your cheapest choice. The banks are trying to scare consumers and force them towards the fixed rates which is why the discounts on VRMs have been cut. No surprise, the fixed rates have also increased. I keep repeating....with our historic low rates, anything under 3% is a steal so don't be finicky about a 40bps drop. Remember, the bank rate still has the possibility of dropping so discount or no discount, the current VRM rate is still a winner.


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## crr243 (Nov 2, 2015)

I called TD yesterday afternoon and was told by phone that their rate was now P-0.3. They assured me very vehemently that the branch could not do better; that the branch sees the same rates they do. I had already done quite a bit of math showing that renewing at a lower variable was going to be more cost effective in my situation (i.e. selling in the immediate term) than paying to re-register the TD collateral mortgage as a standard charge with another lender. The situation may have been different if we were sticking in this house longer. 

I bit the bullet and renewed.

I got a phone call 2 hours later from a branch representative I had spoken with a couple weeks earlier, returning a voicemail I had left him two days prior. He said he could still do P-0.4.

Thankfully, TD lets you cancel your renewal if you do so before the end of the day that you renew. I called immediately and put a halt on the renewal. I called back the branch representative and he renewed me at P-0.4.

The variable discount has been slipping. MCAP dropped another 5 bp to P-0.55 yesterday, so I'm only 0.15 higher than MCAP could offer. The difference over 5 years is only about $1300 in interest, and it was going to cost me almost that much to switch lenders. In addition, since I've renewed 2 months early, I save ~$350 over my previous term's rate, offsetting that $1300 further.

When we sell, I'll just suck up the TD 3-month interest and work with a broker to get a standard charge mortgage somewhere else. I've learned my lesson.


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## My Own Advisor (Sep 24, 2012)

crr243 said:


> Consider me jealous.


We got lucky. 

I would work with a broker. I think you could get 2.3% for 5-year variable easy. Likely 10 basis lower with some negotiation and/or if you have a fat mortgage 

Again, historically, looking at the big picture, killing debt anything under 3% is crazy good.


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## Franky Jr (Oct 5, 2009)

If VRM are about the same currently as say a 2 yr fixed. =~ 2.3%. Wouldn't even a risk taker choose the fixed? I will be crossing this bridge in the spring..


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

Franky Jr said:


> If VRM are about the same currently as say a 2 yr fixed. =~ 2.3%. Wouldn't even a risk taker choose the fixed? I will be crossing this bridge in the spring..


That all depends where you're planning to be in 2 years. If you think you will sell or need to pull out more equity in 2 years time, then yes, the 2 year term makes sense. If you're not planning to do any changes in the long term, then you're better off with the variable since your discount is guaranteed for 5 years. Should the rates skyrocket within the 5 years (highly improbable), you always have the option to switch to a fixed term before the hike. Remember, with the 2 year term you will need to renew at maturity and forced to take what is available at that point in time. 

You can't beat variable in the long term. Banks love it when people have these discussion because you are essentially trying to time the market - and we all know where that leads to. The conversation usually ends with "yeah rates can't go lower so I will lock in a 5 year term" and that's where the Banks want you to be.


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## My Own Advisor (Sep 24, 2012)

Banks love fixed rates.


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## jamesbe (May 8, 2010)

Looks like i'm up on June 1st. Got a letter today about it. Currently at prime -0.85 so anything I get I guess will be worse. Their first offer in the renewal letter was -.25 on the 5 year variable. If I can get -0.5 I'll be happy I guess from the sounds of it.

I deal with BMO although I have a good friend that is a broker and can get me better deals, usually that involves having to pay cancel fees etc, so it turns out better to just stick with the bank.


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

jamesbe said:


> Looks like i'm up on June 1st. Got a letter today about it. Currently at prime -0.85 so anything I get I guess will be worse. Their first offer in the renewal letter was -.25 on the 5 year variable. If I can get -0.5 I'll be happy I guess from the sounds of it.
> 
> I deal with BMO although I have a good friend that is a broker and can get me better deals, usually that involves having to pay cancel fees etc, so it turns out better to just stick with the bank.


Good luck getting -0.50%. Those rates are gone. Maybe they will get back there by June but doesn't look promising. 
Your broker may get better than what was offered but the cost to change is not worth it. Try to get a little better from your bank and just stay there. What's important is you lock in a rate now in case they start increasing.


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## tombiosis (Dec 18, 2010)

Mortgage u/w said:


> Good luck getting -0.50%. Those rates are gone. Maybe they will get back there by June but doesn't look promising.
> Your broker may get better than what was offered but the cost to change is not worth it. Try to get a little better from your bank and just stay there. What's important is you lock in a rate now in case they start increasing.


I'm in a similar situation...renewing in April. I wanted to lock in a rate but I am still more than 120 days out. Can someone explain the 20/20 you mention...?
Is this 20% prepayment of renewal balance per year? what's the other 20...20% payment increase?
please explain in detail what the best pay down options are that I should look for...I want to burn this mtg within 4-5 years if I can...(about 80k owing)
thanks!


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## My Own Advisor (Sep 24, 2012)

The essence of 20/20 prepayment privileges:

The first 20: you can increase your mortgage payment(s) up to 20% over the existing payment, 

and

The second 20: you can prepay up to 20% of the mortgage principal annually without fees or penalties charged.

There are also mortgage products with "double-up" payment privileges, self-explanatory; a great thing in case you want the mortgage burning party sooner than later. 

If you can, try and get a variable rate for all three: 20/20 and double-up payment option.


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## tombiosis (Dec 18, 2010)

update:
so I filled out an app with a broker after a referral from a colleague, and literally 2 hours after sending the broker my info, I get a call from the big bank that holds my mtg.
Coincidence???
The banker tells me that because I am such a valued customer, I "qualify" for a 150 day rate hold. So I reply: "why didn't you call me a month ago when I could have had P-.75 then?"
Now they are offering variable at P-.35...or 2.35% with 20/20
I will wait and see what the broker comes up with...
I wonder if they called me because the broker started poking around?


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## My Own Advisor (Sep 24, 2012)

You should be able to get at least 2.3% with 20/20. Check out RateSpy. All big banks are offering that for 5-year variable.


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

tombiosis said:


> update:
> so I filled out an app with a broker after a referral from a colleague, and literally 2 hours after sending the broker my info, I get a call from the big bank that holds my mtg.
> Coincidence???
> The banker tells me that because I am such a valued customer, I "qualify" for a 150 day rate hold. So I reply: "why didn't you call me a month ago when I could have had P-.75 then?"
> ...


I don't think its coincidence....I just believe your number was next on the renewal call-out list. Usually the broker channel business is not in tune with the bank business - they don't talk to each other and usually run their own departments independently. 

A rate of-or-better than -0.35% is a great given today's rates. You just have to decide if its worth switching lender.... you may incur fees. If there are no fees, then negotiate with your broker. He knows he's competing against your bank so he will do everything possible to get you're business. He has the capability of buying down your rate (paid by his commission kick-back) - usually they can buy-down an extra 5-10 bps. Anything more than that, you potentially wipe out his commission. You can also ask for a cash-back to help you pay for solicitor fees should you incur any.


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## tombiosis (Dec 18, 2010)

M u/w,
what are typical fees I should expect?
I have a commitment document I am going over now...Mtg is for 80k... P-.45 5yr closed, varialble
It says in the document...:
"We may impose fees and other charges from time to time in connection with your mortgage,
including, but not limited to the fees disclosed within this document.
3. Processing Fee and Costs: Any fees and other charges specified in the Commitment may be deducted from advances under
your Mortgage. If for any reason your Mortgage is not approved or no advances are made under your Mortgage"

that first sentence scares me...is this normal?
Replies appreciated


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## jamesbe (May 8, 2010)

I'm holding off until spring to renew but I'm thinking now, unless I can get a really great prime minus then fixed is looking attractive.

They are offering around prime -0.3 or a 2.4 rate right now and yet 5 yr fixed rates are 2.49. The downside on rates is probably .25 at the most so there is a potential for 2.1 if bank reciprocate. But the upside in 5 years from now could be a lot worse, my rate could climb a percentage or more.

I guess I have to hedge how long will the rate be down vs how long the rate will be high and my balance between those points. Some complex math there....


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## tombiosis (Dec 18, 2010)

2.49 fixed? best offer I got was 2.64...
I thought P-.45 was ok...2.25 as of today...


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

tombiosis said:


> M u/w,
> what are typical fees I should expect?
> I have a commitment document I am going over now...Mtg is for 80k... P-.45 5yr closed, varialble
> It says in the document...:
> ...


Depends who the lender is but usually there are no surprise fees. The fees they are talking about are fees such as NSF fees, collection fees, discharge fees, etc etc. Lets just say they are typical fees which you will know about in advance should you have to incur them.

Then there are the other fees such as solicitor fees or title insurance fees. Again, you will be informed beforehand.

Great choice on the term chosen and the rate is awesome (given today's standards)!


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