Dean Garrett

One Big 5 Bank did in fact drop their 5 year fixed rates late last week 0.15%. PM me to find out which one. Will other banksfollow suit? Yes. If you have an approval in place today...will your bank aoutomatically drop the rate on your approval? No! Does my firm have access to lenders that ALREADY were BEATING the big banks (some by 0.50%) - 100% yes. In most cases we can at least match if not significantly beat bank rates. The last calculation I ran for a client last week on his $465,000 RBC Renewal, we would save him $8600 in interest versus the RBC offer. It pays (BIG) to talk to a mortgage broker outside your bank at renewal time! 60-90 days before renewal is the time to reach out to us. A Little on Regulations (Behind the Curtain)... As of Jan 1, 2019 Capital Requirements for the Banks, imposed by Government Regulators, has increased. This cuts into their profits (which they dont like) and so they have been slow to drop rates following the bond market, which they always do. Prepayment Penalties on Variable Rate Mortgages are precisely regulated to a maximum of 3 months interest. Fixed Fate Mortgages are regulated too, however are based on Interest Rate Differential (IRD), which can cost borrowers the equivalent of 10 months - 20 months - or even 30 months interest! Its not all about Rate. Equally as important is early term break penalties (AKA Prepayment Penalties). The Big 6 have the HIGHEST breakage penalties of any other Canadian lenders. IRD Penalties (Interest Rate Differential) should be a clear and concise, easy to understand calculation, just like Rates are easy to understand. They are not as the government allows the banks to keep them hidden and difficult to calculate for the lay person, and even for many bankers. MOST IMPORTANT: In Decreasing Interest Rate Environments - These penalties can be TENS of THOUSANDS of dollars on mortgages $300k-$600k (Fairly common mortgage amounts for most Canadians). Protect yourself and ask the question What if I need to break this 5 year mortgage early - How is my penalty calculated?. Most lenders will shy away from answering this as it can be so convoluted and they really dont know as its based on posted rates at time of payout. Did you know approx 60% of Canadians break their 5 year term mortgages (sell/move to another property, refinance, marital breakdown, traumatic life event, etc). Truly, when you are trying to negotiate with your bank over 0.05 or 0.10 less on a rate - they often will come down, knowing 6 of 10 will break and the thousand or two they concess on up front interest they will make up by the FIFTEEN to THIRTY THOUSAND prepayment penalty they charge many of their clients (in decreasing rate environments due to their IRD clause). Working with an independent Licensed Mortgage Broker ensures you get a great Rate and also your other interests are protected. My business is built on Client Relationships NOT Client transactions. Call, Text orEmail at any time - I am happy to discuss your individual needs andprovide custom mortgage advise.