Categories for Mortgage Rate Tips

Bona-Fide Sale Clauses: Mortgage Saver or Mortgage Trap?

Imagine spending hours of your life to: research the best mortgage negotiate for a better rate apply to refinance at a new lender answer all the new lender’s questions collect all your documents get an appraisal review all the paperwork submit all the documents find a lawyer to close the mortgage get ready to close …then be told just five...

Interest-Only Mortgages. Back in Canada

You’ve probably never thought about not paying the principal on your mortgage. It sounds almost un-Canadian. But it’s a crazy-sounding idea that, in limited cases, is not so crazy. Out of thousands of home loans in Canada, only two products let you pay just the interest each month: A Home Equity Line of Credit (HELOC) An interest-only mortgage (I/O). HELOCs...

How to Get Ripped Off with Cashback Mortgage Rates

The most competitive online mortgage brokers are just itching to give you a better rate. But many lenders won’t let them. Most broker lenders have what’s called “rate buydown limits.” In other words, the lender limits how much a mortgage broker can reduce your interest rate by giving up some of their commission. Here’s a simple example. Suppose a lender...

A Tip for Those With a HELOC Who Want to Switch Lenders

In Canada, the cheapest mortgage rates are usually available on insured (or insurable) mortgages. But refinances cannot be insured thanks to rule changes in 2016. That’s been a problem for folks with existing mortgages—particularly those who have “collateral charges.” Collateral charges are mortgages that readvance or have a line of credit attached to them. Examples include the: RBC Homeline Scotiabank...

Canada’s Inverted Yield Curve. What Happens to Mortgage Rates Now?

The Canadian yield curve has officially inverted and that’s bearish for mortgage rates. An “inverted yield curve” (in this context) means that the interest rate on almost every Canadian government bond is now below the Bank of Canada’s 1.75% overnight rate. That’s pretty rare. Why it Matters Inverted yield curves are a danger sign. In a normal economy investors like...

Banks Entice Borrowers with Cash

Some big banks want to buy your mortgage business, literally, with cash. HSBC, CIBC and BMO are all “giving away” money. Here’s a quick run-down of their offers: HSBC Cash offer: $1,000 for $200,000 to $499,999.99 mortgages $2,000 for $500,000+ mortgages Available on all 5-year closed terms CIBC Cash offer: $1,000 for $100,000 to $299,999.99 mortgages $1,200 for $300,000 to...

Why Aren’t Rate Sites Showing You the Lowest Rates?

The number of Canadians who blindly trust mortgage rate comparison websites is staggering. This year, almost two million households will renew or take out a new mortgage. Of these, CMHC found that over 78% who research mortgages online compare interest rates. The majority of these folks, those who visit a rate comparison website, are simply not being shown the market’s best...

Down Payment Assistance Programs Across Canada

So many young people want to build home equity and get out from under their landlord’s thumb. But they can’t. They don’t have the down payment to qualify for a mortgage. For many modest-income Canadians, saving up the 5 percent minimum down payment (or 20 percent if you want to avoid CMHC insurance) can take years—many, many years. While some...

Variable vs. ARM: One’s Not Better Than the Other

Many don’t realize that there are two flavours of floating-rate mortgages: The adjustable-rate mortgage (ARM) Its payment rises and falls with prime rate The variable-rate mortgage (VRM) Its payment doesn’t change when prime rate changes The only exception is when rates soar so much that you’re not paying all the interest. Then the payment generally rises to cover the interest...

Pay Your Variable Like a Fixed: A Strategy Check

A lot of people in the mortgage biz like to tell customers: “Pay your variable like a fixed.” In other words, increase the payment on your adjustable-rate mortgage (ARM) to match the payment you would have made, had you chosen a 5-year fixed. The purpose of this strategy is to pay more up front so that if rates (and your...