Will Bank of Canada 0.25% Interest rate affect mortgage Rates?

[cidley69]

Does anyone know if the newly announced Bank of Canada overnight rte of 0.25% will trickle down to consumer loan and/or mortgage interest rates?

If so, what banks are doing this and which aren't?

[sputnik]

Originally posted by cidley69
Does anyone know if the newly announced Bank of Canada overnight rte of 0.25% will trickle down to consumer loan and/or mortgage interest rates?

If so, what banks are doing this and which aren't?

The major banks lowered their prime rate to 2.25% yesterday.

[benyl]

Mortgage rates are derived from the bond rate, not the overnight lending rate. We have been over this before.

[em2ab]

My broker offered me 3.69% locked for 5 years yesterday.

[sputnik]

Originally posted by em2ab
My broker offered me 3.69% locked for 5 years yesterday.

Which lender?

The reason I ask is if it is a tiny lender it really has little pull when negotiating with a bigger bank.

However if it is a bigger bank offering a rate like that, the bigger banks will probably try harder to match it.

[Weapon_R]

Industrial Alliance is offering that rate. They are far from small.

Edit: OP, didn't you just buy a house a few months ago?

[cidley69]

This was more a general interest question than anything. I did buy a house 2 years ago, and am locked into a 5 year term. Because I bought at the peak of the market, I am now backwards on my owing/value situation. Basically screwed!

lol

[Kloubek]

^^ Well, not really. You can always pay it out with penalty and then re-finance. But chances are, you'll pay more that way....

[benyl]

Originally posted by Kloubek
^^ Well, not really. You can always pay it out with penalty and then re-finance. But chances are, you'll pay more that way....

He is saying that he is upside down on the house. i.e. he owes more than it is worth.

[bimmere92]

Originally posted by benyl


He is saying that he is upside down on the house. i.e. he owes more than it is worth.

unfortunately alot of people have ended up in this situation. When I asked my lender how I would go about doing a refinance, they tacked on a $21,000 penalty... like wtf!?

any suggestions for people like us?

[cidley69]

My lender said the max allowable to be refinanced is 90% of the worth of the house.

So if you owe more than 90% of the house's current value there is no option.

[G]

I was locked into a 5 year fixed at 4.84 until November 2010 ATB offered me a blended rate of 4.21 if I signed another 5 years. I decided to take it and increase my payments so that it will be the last time I sign.

If you use the mortgage calculators you find online you will be surprised how much interest you pay over the life of your mortgage.

I should have went variable with my primary because my rental place is variable and it is now at 1.65.

[blownz]

^ I did that about 7-8 years ago on my previous house. Banks will often give you a blended rate which will be close to the current rates but then waive any penalties. I think my paperwork had some small print saying something along the line that if I cancelled my mortgage in the next 2 years I would have to pay penalty on the current mortgage and the old mortgage where they waived the penalty. Basically them just really trying to lock you in.

In the end though I got out of that mortgage about 3 years later when buying a new place but they waived the penalties since the new mortgage amount was about 3 times the old amount.

[G]

It works for me because I can still dump 20% on the initial amount into it each year. So technically I can pay it off in about 3 years.

Originally posted by blownz
^ I did that about 7-8 years ago on my previous house. Banks will often give you a blended rate which will be close to the current rates but then waive any penalties. I think my paperwork had some small print saying something along the line that if I cancelled my mortgage in the next 2 years I would have to pay penalty on the current mortgage and the old mortgage where they waived the penalty. Basically them just really trying to lock you in.

In the end though I got out of that mortgage about 3 years later when buying a new place but they waived the penalties since the new mortgage amount was about 3 times the old amount.

[sputnik]

Does anyone have any experience converting their variable rate into a fixed rate?

Were you still able to negotiate your fixed rate?

[el-nino]

If anyone needs some answers or would like me to look over your mortgage and give some solid advice please pm me.
As cidley69 said
"My lender said the max allowable to be refinanced is 90% of the worth of the house.

So if you owe more than 90% of the house's current value there is no option."
If your house is not worth as much as the mortgage your pretty hooped!

[Weapon_R]

El-Nino: If I acquired a property through an assumption of mortgage with a fixed rate @ 5.5% and wanted to break the mortgage to resign at a variable rate with another company, would I have to repay the CMHC fees again (which were paid at the initial purchase by the first buyer)?

[blownz]

Originally posted by sputnik
Does anyone have any experience converting their variable rate into a fixed rate?

Were you still able to negotiate your fixed rate?

The general rule at RBC anyway is that is you go with the posted rate, you can switch at anytime but if you want a negotiated rate you will have to pay the penalty stated in your mortgage agreement.

But like I said before, they always have flexibility if you are a good customer.

[Chandler_Racing]

Originally posted by el-nino
If anyone needs some answers or would like me to look over your mortgage and give some solid advice please pm me.
As cidley69 said
"My lender said the max allowable to be refinanced is 90% of the worth of the house.

So if you owe more than 90% of the house's current value there is no option."
If your house is not worth as much as the mortgage your pretty hooped!

Left you a PM