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Discussion Starter #1 (Edited)
I just bought my very first home, a condo on assignment, and have to put $100K down, with a $280K principal remaining. I already got a mortgage approval with TD (variable closed @ Prime 2.70% minus 0.35%). Can I do better elsewhere? TrueNorth for example offers 1.98%, which will save me $5K in interest over 5 years - which doesn't seem like much now that I actually used a calculator. I was warned against brokerages, but anyone got a different opinion? FYI, I have a healthy steady income, and would like the flexibility to pay off big chunks of my mortgage periodically. Given my living expenses, if I save less than 10K a year on top of that and put the rest to the mortgage, it can be still be done in less than 10 years, though I probably won't be approved for that lol. I might also sell within 5 years to upgrade. FYI I'm 27, if that factors into anything.

I close with builder in 2 weeks, so is there even enough time to go elsewhere?
 

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Discussion Starter #3
I skimmed the above and it doesn't look like something that would affect me (correct me if I'm wrong), since I have no other debt and no need for anything other than the regular...?
 

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The big one is if you ever decide to move your mortgage to another institution there could be significant fees associated with the move.

There's other impacts (and benefits) but the difficulty in moving your mortgage at renewal time is probably one of the bigger drawbacks.
 

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I don't know who warned your against mortgage brokers but whoever it is did you a disservice. I would never sign a mortgage agreement without having gone through a broker. Brokers can shop around for the best mortgage to suit your needs - they aren't like the bank reps that are trying to sell you whichever product will earn the most revenue for the bank. I've regularly had a broker obtain a better mortgage rate from the bank holding my expiring mortgage than what I could possibly negotiate directly with the bank rep. Best of both worlds - don't need to change institutions but end up with a better rate (and this is even after the bank pays the mortgage broker commission, telling you how much of a rip-off the rates are that they offer to individuals renewing mortgages).
 

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TD registers its mortgages as collaterals. Were you told this? Usually 10 business days are needed by some lenders so your time line is probably against you. Going through a mortgage broker allows them to find the lowest rate for you that best fits your requirements. Banks love you to sign on the bottom line. Look at their yearly profits.

It is unfortunate that an extra $5000 is going into their bottom line instead of staying in your pocket.
 

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Discussion Starter #7
At this point, I don't have time to study alternatives in terms of broad generalities. I need specific numbers. One coworker suggest that my mortgage should come from a different bank than my regular banking, for better leverage (right now everything is with TD), but he seems to think 2.35% for 5 years is pretty good, so maybe I'm already reaping benefits from customer loyalty? Anyone with TD with a different rate?
 

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You should maybe stay away from brokerage firms who will physically lend you the money - but I would not stay away from mortgage brokers altogether. True North can probably get you 1.98% with TD. The broker will research the best mortgage product, rate and lender best suited for your needs. Mono-line lenders are great as well. Research First National - they are the top non-bank lender in Canada. Its a little known yet surprising fact. To access them, or any other such as Mcap, HomeTrust, Street Capital etc, you will need a mortgage broker to assist you.

Stay away from banks if you are going fixed. Their penalty calculations are horrendous. They also register collateral mortgages which cannot be switched for free to other lenders.

As for rates, I advise you go variable or even better, seek a 2 year term since they are the lowest offered at this time. If your condo will not be built in the next 120 days, probably doesn't matter the rate you choose now since it will change by the time you close the deal.
 

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Discussion Starter #9
Condo is already complete and will register within a couple months. Can't I just skip the broker part, go to TD directly and ask them for say 2.1%?
 

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you can try but highly unlikely you will get it. Banks run their broker channel completely separate. Rates and products can be different from each other. If you don't want to deal with a broker, do lots of research and choose a mortgage that best suits your needs. Its not always about the lowest rate. The product you are getting is much more important and can save you thousands more than a simple spread of 20 - 30 bps.
 

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Discussion Starter #11
Right now, True North is offering 2.1% for a 5 year variable closed, vs 2.35% from TD for the same. The terms for True North actually seem better given the "collateral charge" issue with TD. Is that the best rate I can get from TD? Time isn't exactly on my side, and I plan to commit to something within 24-48 hours, research be damned lol.
 

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Another option is to go with a 6 month open mortgage. The rate is a little higher but buys you time to do your research and get the best rate and best mortgage for yourself. You can pay it off anytime without a penalty.
 

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I would see if TD will negotiate based on True North rates.

Just make sure with your variable mortgage, TD or True North offers flexibility in prepayment privileges. Confirming IRD of only 3 months, if you decide to break the mortgage, needs to be confirmed as well.
http://www.myownadvisor.ca/mortgage-tips-homeowners-ages/

Historically speaking, your rate with TD is still very good.
 

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Definitely try a few brokerages, it never hurts to get more quotes. I always found the lowest rates though brokers and never had any issues with them.
 

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Right now, True North is offering 2.1% for a 5 year variable closed, vs 2.35% from TD for the same. The terms for True North actually seem better given the "collateral charge" issue with TD. Is that the best rate I can get from TD? Time isn't exactly on my side, and I plan to commit to something within 24-48 hours, research be damned lol.
Find out from True North who is offering that rate and what the criteria are for that mortgage. Sometimes low rates come with loan restrictions and stripped of all benefits. Get informed before you sign.
 

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Big banks will not price vs private lenders or mortgage brokers only those who are their direct competition (schedule I banks).
Secondly, be careful, as I have lost customers to mortgage brokers who chase rates but end up paying broker fees and lose out on particular features of mtgs that can be beneficial (20-20 etc, mtg cash account etc).

Just because on the outside it has a flashy low rate it doesn't mean it is your best option.
 

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Big banks will not price vs private lenders or mortgage brokers only those who are their direct competition (schedule I banks).
Secondly, be careful, as I have lost customers to mortgage brokers who chase rates but end up paying broker fees and lose out on particular features of mtgs that can be beneficial (20-20 etc, mtg cash account etc).

Just because on the outside it has a flashy low rate it doesn't mean it is your best option.
Consumers who qualify for A credit lenders will not pay broker fees. They may be found with B lenders and definitely if it is a private mortgage.
If a customer is looking at a "flashly" rate there is nothing wrong with putting cash back in their pocket. All features would be disclosed upfront and certainly in the disclosure papers that they would sign. If a customer is happy with a 15-15 prepayment as opposed to a 20/20 then all the better for them.
 

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Discussion Starter #19 (Edited)
I went back to TD with True North's 2.25% (2.1% doesn't apply to assignments). TD says they can't match private brokers, but submitted a request for 2.3% for me for 5 year closed variable, and another request for 2.1% for a 2-year fixed.

Again I don't need to hear about the theory lol, can someone simply tell me if this is the best I can get? Is anyone getting better elsewhere? Would you do the 2 year or 5 year, given the above rates? I don't think it'll matter to me whether I can prepay 15% or 20% each year (doubt I'll have that extra dough for the next few years anyway). I'll most likely prepay 5-10% per year.
 
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