WWBD for Mortgage: 2023 Q4 edition

[roopi]

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damn where was this if you don't mind sharing? Best i got was p-1.05

td. Keep in mind TD has their own prime rate as well which is higher.

[ercchry]

Radius has P-1.1 on a 3yr variable… need a broker though

[phreezee]

Three of the big banks have just lowered fixed mortgage rates; Variable-rate discounts are shrinking.

https://www.canadianmortgagetrends.c...l-more-follow/

[msommers]

“Variable-rate mortgage spreads are ticking up, which tells me that lenders are pricing in rate reductions,” Sims says. “They want to try and drive business to fixed products right now with rates being so high, so it tells me that there is potential for the Bank of Canada to cut sooner, faster and deeper than we are currently pricing in.”

Tell me what else your crystal ball says!

[killramos]

If only there was a mechanism to establish consensus on what rates are predicted to be in the future, and a market to trade on those predictions for “futures” periods and establish what a current fixed price with a healthy premium baked in as a cushion.

Nah, Must be witchcraft.

[msommers]

Talk to 10 different analysts and get 10 different answers, particularly when you narrow the timeline to the last 3-4 years.

[suntan]

We're at the point where the guy has pulled his dick out of the girl's ass and now she's sucking on it. It's going back up her ass soon enough.

[msommers]

Vivid.

[Buster]

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If only there was a mechanism to establish consensus on what rates are predicted to be in the future, and a market to trade on those predictions for “futures” periods and establish what a current fixed price with a healthy premium baked in as a cushion.

Nah, Must be witchcraft.

this guy fucks

[sabad66]

Well the poll ended up pushing me to variable and I sent the papers yesterday, so I hope suntan is wrong and there is no round 2 of anal

[pheoxs]

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Well the poll ended up pushing me to variable and I sent the papers yesterday, so I hope suntan is wrong and there is no round 2 of anal

What’d you end up getting as a prime - x?

[sabad66]

Same as what I had in the poll, prime - 1.1. Mcap’s prime rate is 7.2 so I guess I’ll be paying 6.1% for now.

My main thought process is that I think Canada is heading into a recession soon (if we aren’t already in one) so they are going to have to cut rates soon. But now that I said that I’m sure the exact opposite will happen so anyone looking as of today go for fixed!

[ThePenIsMightier]

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Same as what I had in the poll, prime - 1.1. Mcap’s prime rate is 7.2 so I guess I’ll be paying 6.1% for now.

My main thought process is that I think Canada is heading into a recession soon (if we aren’t already in one) so they are going to have to cut rates soon. But now that I said that I’m sure the exact opposite will happen so anyone looking as of today go for fixed!

I think there are many potentially pending conflicts/wars on the horizon that deserve consideration when guessing the medium term economic outlooks.
I totally agree with you on a pending recession, but... if the global superpowers keep pumping billions of dollars into these proxy wars in Ukraine, Israel and soon-to-be Taiwan, that might certainly stave off recession.

[msommers]

Looking at this more closely as we're up for renewal early Feb. Currently at 71% LTV if I use the latest City assessment.

Best I can find for a fixed term is 5.14% from BMO

https://rates.ca/mortgage-rates/calgary

[mr2mike]

Personally, I don't think rates are dropping and why do variable for 1% higher.
Do this BMO fixed. Or call them and see if they'll reduce it based on your credit rating.

[ercchry]

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Looking at this more closely as we're up for renewal early Feb. Currently at 71% LTV if I use the latest City assessment.

Best I can find for a fixed term is 5.14% from BMO

https://rates.ca/mortgage-rates/calgary

I’d try and stick to a monoline for a fixed term, bank IRD calcs are nasty if you do need to break it.

LTV can play a part in what you’re doing for sure… but the question is, originally did you pay for mortgage insurance (cmhc)? And since then, have you advanced new funds (refinancing or porting and increasing)?

If it’s insured, it’s an insured transfer. This is a specific product, rates are typically close to insured purchase rates, which is better than a conventional 70% LTV loan.

If it’s not insured, is it insurable (am under 25yr, etc)? Most monolines have an insurable transfer product that does not have any costs to you. (Ie. legal fees). These are hovering around 5.24%, marathon and RFA are a little less… but if you have a decent loan size I’m sure you can find a broker to buy that rate down.

[pheoxs]

Just to add if you have any doubt you may sell within your next 5 years then it's really worth considering how much the IRD penalty can be if rates do in fact fall. If rates do fall 2% or whatever over the next few years it can be a substantial penalty to break.

[ercchry]

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Just to add if you have any doubt you may sell within your next 5 years then it's really worth considering how much the IRD penalty can be if rates do in fact fall. If rates do fall 2% or whatever over the next few years it can be a substantial penalty to break.

Yeah, a 2% IRD is one thing… but not all IRD are built even.

Common with the big banks is special rates and posted rates. So you break a term, and they use the rate of the term that’s closest to what you have remaining… which is most likely higher than a 5yr term… but even if you break it in a month, rates stay the same and 5yr is the closest… well, BMO is currently at 7.11% for posted… so almost a 2% IRD without a drop.

Monolines don’t do that shit, so if they are using the closest term it’s in market. Same scenario would result in 3 months interest penalty. But read the fine print… as some IRDs are are based on cost of capital, or “reinvestment fee” which will be posted on their website as well, and will be way better than the BS posted rate game big banks play

[ExtraSlow]

Can confirm IRD can fuck you in the ass. Happened to me, was pretty meaningful dollar amount at the time

[msommers]

Best rate we got back from bank was 5.35% for 5-year fixed. Was definitely thinking we'd get closer to 5% given what rates I showed them last week in our appt (4.89%).