Renewing Mortage Early?

[liquid]

Anyone know what costs/penalties are involved in renewing a mortgage early? I'm thinking of switching from my variable rate mortgage to a fixed rate due to inflation fears......

[Canadian Turbo]

Re: Renewing Mortage Early?

That usually depends on your particular mortgage Colin. I think depending on whether you have CMHC insurance and how long is left that greatly effects how much you owe. The best is to call your banker and discuss it as it may cost you too much to really benefit at this point in time.

[liquid]

Re: Renewing Mortage Early?

That usually depends on your particular mortgage Colin. I think depending on whether you have CMHC insurance and how long is left that greatly effects how much you owe. The best is to call your banker and discuss it as it may cost you too much to really benefit at this point in time.

Yea I have an Appt today, so I'll see. Technically the Interest Rate would be increasing, so I don't see how the standard three month rule could apply.

Alas... I guess I'll find out.

[Aleks]

Re: Renewing Mortage Early?

With my variable rate mortgage, I have the option at any time to switch to a fixed rate, it was part of the plan I have..

[Smarty39]

Re: Renewing Mortage Early?

With my variable rate mortgage, I have the option at any time to switch to a fixed rate, it was part of the plan I have..

Same with mine....through RBC

[Tuna]

Re: Renewing Mortage Early?

Yea, Blairs advice is probably best but they usually are ok with you locking in (thats generally what banks want you to do), so if they can get you out of a variable they'll probbaly do it.

[James]

Re: Renewing Mortage Early?

Same with mine....through RBC

x3

[18TWolf]

Re: Renewing Mortage Early?

I have a credit line mortgage through TD Canada Trust and there is no penalty to switch to a fixed rate standard style mortgage. Where you get raped is when you want change your fixed rate mortgage before the term is up. I am looking at locking in now too. My broker thought that the interest rates may go up a little more this year but probably come back down again next year. So to make the jump you should expect a long term increase of over the current fixed rate to really make it worth while to switch. Just my $0.02. Shoulda locked in a year ago.

Chris

[Billip]

Re: Renewing Mortage Early?

Anyone know what costs/penalties are involved in renewing a mortgage early? I'm thinking of switching from my variable rate mortgage to a fixed rate due to inflation fears......

For what it's worth, the Bank of Canada has signalled that it will likely hold the line on interest rate increases for a bit.

http://www.cbc.ca/story/business/nat.../bankrate.html

[Tuna]

Re: Renewing Mortage Early?

For what it's worth, the Bank of Canada has signalled that it will likely hold the line on interest rate increases for a bit.

http://www.cbc.ca/story/business/nat.../bankrate.html

That's what I heard too, but can someone clarify something?.....

Even if the Bank of Canada keeps the rate the same can't the banks do what they want? For example sure prime stays at 4% but what if they decide to charge 11% above prime? (an extreme example I know) so now you're at 15% even though the bank of Canada hasn't budged the prime.

Not saying this can or will happen, just curious. I know this type of thing would kill some provinces as they are totally tapped out but what about Alberta in their boom? It's possible that we could (at least initially) absorb that kind of stuff.

Again, just a question as i'm normally a short term mortgage person but recently locked in for a couple years since my variable was almost the same as locking in (banks are discouraging going variable, which theres no surprise as I saved a BUNDLE)

[kuhli]

Re: Renewing Mortage Early?

You're right, the banks don't have to move with Bank of Canada prime, but I'd bet absolutely everything for weak odds that they will!!!

Agreed, I think we all missed locking in, I'm riding it baby!

[Billip]

Re: Renewing Mortage Early?

Even if the Bank of Canada keeps the rate the same can't the banks do what they want? For example sure prime stays at 4% but what if they decide to charge 11% above prime? (an extreme example I know) so now you're at 15% even though the bank of Canada hasn't budged the prime.

You're absolutely right... they can. But the most important factor to remember is competition. The highly competative market for mortgages is what keeps the banks/brokers/credit unions/etc. from doing whatever they want. They could... but nobody would come to them for mortgages anymore (unless they all did it simultainiously).

This is just another reason why the merging of banks is fundamentally a bad thing for the Canadian consumer, but is great for the banks. (sorry off topic I know)

[Tuna]

Re: Renewing Mortage Early?

You're absolutely right... they can. But the most important factor to remember is competition. The highly competative market for mortgages is what keeps the banks/brokers/credit unions/etc. from doing whatever they want. They could... but nobody would come to them for mortgages anymore (unless they all did it simultainiously).

This is just another reason why the merging of banks is fundamentally a bad thing for the Canadian consumer, but is great for the banks. (sorry off topic I know)

yea good point as most people shop around, hopefully they won't clue in and start syncing up like the gas stations (but seriously )

As for locking in, I bartered a pretty good rate and locked in, only because the variable rates were getting as high as the locked in rates, and with building a new house that's worth more money I thought the regular payments wouldn't be so bad for a while.

As for locking last year vs. this year, I actually got a better rate this year then what was offered to me 1.5 years ago so wouldn't be SO bad if you lock in.

[kuhli]

Re: Renewing Mortage Early?

Let's just spill the beans, I'm at prime minus .75 with a 6 year variable product but the last three years are open.

[Billip]

Re: Renewing Mortage Early?

When I went to renew my mortgage in January I just printed out the current mortgage rates sheet from the CREB website, took it to my bank and said "i want the lowest rate on this page".

... they didn't give it to me... but I got marginally above that... and it was WAYYYY less than the posted rate. I highly recommend this method.

http://www.creb.com/public/hbuyer/hb-mortgage-rates.php

PS: I renewed for 1 year at 4.7%... i'm buying a new condo... hence the short term.