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  #1411  
Old 2020-08-14, 10:09 AM
MortgageGuy MortgageGuy is offline
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Join Date: Jul 2008
Location: Ottawa, Ontario
Posts: 1,083
Default Stress test rate and weekend rates ;)

So bank of Canada has reset (reduced) the qualifying Stress test rate as of yesterday. Now sitting at 4.79%.
Every little bit helps!
https://www.cbc.ca/news/business/mor...test-1.5684685
The article is an interesting read with some history on the Stress test rate.
Slight drops in rates on some terms.
Pre-approvals being done at 5 yr fixed 2.19%
Best 5 yr fixed rate is 1.99% for an insured purchase.
2.04% for a 65% advance.
2.19% for a 80% advance mortgage.
For complete list of rates and terms go to
https://mortgagemoney.ca/best-mortgage-rates/
Have a great weekend,
Dan
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Dan Faubert
Ottawa-Carleton Mortgage Inc.
Brokerage Licence # 10419
dan@mortgagemoney.ca
www.mortgagemoney.ca
https://www.fb.com/OttawaMortgageMoney
"Great Mortgage Rates"

613-222-2624 anytime
Off 613-563-5070
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  #1412  
Old 2020-08-19, 09:27 AM
Perdition Perdition is offline
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Join Date: Aug 2020
Location: Kemptville
Posts: 2
Default 20%?

Hi Dan,

First time home buyer here. I have a question regarding down payments? My wife and I have saved up 20% of our home cost (it is a new build being ready for August of next year),

We went to TD and got approved and they told us they could not lock a rate in this early. Which we were perfectly fine with, however after doing some research it seems that borrowers who give less than 20% seem to get a lower rate than people who give 20%? Is there a reason for this?

Would you recommend trying to save more or giving less of a down payment? The home we are buying is 389,900 with about 5k in upgrades for a total of 394,900

Sorry if this is an obvious answer. First time home buying is so confusing!
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  #1413  
Old 2020-09-28, 10:53 AM
MortgageGuy MortgageGuy is offline
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Join Date: Jul 2008
Location: Ottawa, Ontario
Posts: 1,083
Default rate update Sept 28th

Realize it has been a long time since posting, I call it Covid time as it just seems like the year is flying by! Sorry about the long delay in answering..
So to first Perditions question...
When anyone purchases with less that 20% down payment, the borrower has to pay an insurance premium through Canada Mortgage and Housing(CMHC, the insurer). On a $500K purchase with 5% down payment, the insurance premium added to the mortgage would be $19,000.. ya I know YIKES...
that insurance premium guarantees the lender(bank) lending the money, that if the borrower defaults on the mortgage, CMHC will pay the bank back any loss they incur in disposing of the property after taking it from the borrower.
So in the banks eyes, a guarantee of never losing a penny on the mortgage, thus they offer a better rate than to someone who has more than 20% down payment. Because with 20% down or more, the bank doesn't have that guarantee, and could be exposed to a loss if the borrower defaults on the mortgage.
AND NO, it is never worth putting in less than 20% down(when you have more than 20% available) just to get the better rate.

2ndly, NO I would also never wait till I saved the 20% down payment before purchasing if you foresee not being able to have twenty % down for a long time...

Generally speaking MOST borrowers 1st time around never have the 20% down payment, thus the reason CMHC years ago..... came up with the insured program allowing a purchase with less than 20% down to buy a home.

Best rates available today that I know of are...

Best 5 yr fixed rate is 1.75% for an insured purchase.
1.89% for a 65% advance.
2.04% for a 80% advance purchase mortgage.
For complete list of rates and terms go to
https://mortgagemoney.ca/best-mortgage-rates/
As always, rate isn't everything, Collateral mortgages, restrictive sales clauses... be SURE of what you are signing up for with ANY mortgage you take.
Have a great week,
Dan
__________________
Dan Faubert
Ottawa-Carleton Mortgage Inc.
Brokerage Licence # 10419
dan@mortgagemoney.ca
www.mortgagemoney.ca
https://www.fb.com/OttawaMortgageMoney
"Great Mortgage Rates"

613-222-2624 anytime
Off 613-563-5070
Reply With Quote
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