Quick mortgage question

[Manhattan]

I'll be taking possession of a home in November and won't need a mortgage until then. With all the rumors of increasing rates, can I and should I lock in to a mortgage rate today rather than watch the rates go up in the next few months? TIA

[Kloubek]

I know banks will generally guarantee the rate for a certain amount of time, but I don't think its normally a few months. A month maybe?

[hrdkore]

you can only lock in for max 3 months depending on bank policy itself.

[Sugarphreak]

...

[Manhattan]

Mine is building. Sounds like I should lock it in ASAP.

[Tripz]

Banks usually will have builders/new build mortgage and rates is higher than the current rates you can obtain now. If the rates are higher than the new build mortgage - well then you will just get the rate that was quoted. When the property comes closer to completion, go into your bank and get a rate guarantee for 90 days (don't think rates are going to rise much this year).

[dj_rice]

You should of locked in before yesterday. The rates already went up

[TimLacroix]

Originally posted by Manhattan
I'll be taking possession of a home in November and won't need a mortgage until then. With all the rumors of increasing rates, can I and should I lock in to a mortgage rate today rather than watch the rates go up in the next few months? TIA

Hi Manhattan,

You're in luck. There are a couple of lenders that have 6-12 month rate holds for NEW builds.

As a rule of thumb, most lenders that mortgage brokers use have a 120 day rate hold given you very good rate protection. Some lenders are also 90 days, 60 days and even less. *There are also promotional rates for closing that are short.

NOTE: There was rate increases the past 2 weeks however, the markets have settled for the moment. Meaning we should not see rate increases at the moment.

Now is the time to at least obtain an approval and let (us) a mortgage broker watch and manage the different rate opportunities that are out there for you.

Here is the best part... working with us will allow us to protect you from a worse case scenario such as a 6 month rate hold. And then look at the 120 day rate once within that time for possession... we will keep you posted and also watch the promotional rates as possession gets closer.

With any one approval, you are not committed... just protected. So it is our job to monitor, update and provide you with options right up until possession.

If you are interested in speaking with us... PM me and we can get the ball rolling.

BTW - CONGRATULATIONS... on your new purchase.

[Frankie88]

Congrat to your new home
Manhattan! Include myself on your "shopping list", I might be able to give you a competitive 6 months rate hold on your new home which you can compare it with other banks. :)

[tpurcell4]

2 cents!!!

Tim makes some great points and the bond yield has gone done almost 10 points since last week. If you like to be hands on you can follow along with the bond yields at:

http://www.bankofcanada.ca/rates/interest-rates/canadian-bonds/canadian-bonds-yields-5-year/

It usually takes a spike or drop over 10 points for the lenders to start looking at changing the rates as it starts to cut into their minimum margins so definitely get something locked in and let your mortgage professional, whomever you choose to work with, monitor the industry for you and make sure when you take possession in November you have the best rate.

On a 6 month rate hold, currently you are looking at 3.04% as long as you qualify with that lender!

Cheers,

Todd