Switch to Variable or Stick with 5.00% fixed

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gforacle
Member since: Oct 05

Posts: 103
Location: Brampton
Post ID: #PID

Posted on: 29-03-09 11:21:31

Hello Pramodji,

The penalty portion will be added as mortgage, but will be paid back separately and can be applied back to the mortgage immediately.

Does this make any difference to the deal?

Regards
Chetan

Pramod Chopra
Member since: Sep 03

Posts: 1284
Location: Pickering, ON
Post ID: #PID

Posted on: 29-03-09 13:21:59

Quote:
Originally posted by gforacle

Hello Pramodji,

The penalty portion will be added as mortgage, but will be paid back separately and can be applied back to the mortgage immediately.

Does this make any difference to the deal?

Regards
Chetan

Chetan,

If I understand it correctly, the bank is adding your penalty in the mortgage but giving you back as a 'cash back' and you can apply it to the mortgage. If that's it correct, then by doing this the bank is essentially 'tying' you up with cash back and hence if any time in future, before the expiry of the term, if you want to pay out the mortgage completely then not only you have to pay the penalty but the 'prorated cash back amount' as well.

You can confirm this with the bank and find out exactly all the terms and conditions of the mortgage before signing on the 'dotted lines'. Any questions, you can call me and discuss.

-----------------------------------------------------------------

Pramod Chopra
Senior Mortgage Consultant
Mortgage Alliance Company of Canada

AshwaniG
Member since: Jul 04

Posts: 1484
Location: Convinient
Post ID: #PID

Posted on: 29-03-09 21:50:42

Hi Nightmare !
Pls check for rates as I see that 5 yrs fixed is lesser than 4 yr fixed .. I dont know if that is possible or just a typo error . I am also in mkt with almost same scenario.
AG

Quote:
Originally posted by Nightmare

Quote:
Originally posted by ftfl

Please see if he rates provided match the other posted ones on different websites, or even better. Also you should call and ask if they have been updated. Because some of the brokers have not done so.

Here is a link to one of them: http://www.mortgagediligent.com/rateadvisor.aspx

Dicker with them as there is room for dickering and get them down, if you can.

Good Luck.

Freddie.

I have been offered 3.3 for variablr by Scotia (not my current banker) and 4.19% for 4 year fixed.

I went to the site provided in link and speak to the broker as their rates for 5 yr fixed are more competitive. I have pasted rates below from broker's site.

Thanks for help

Prime Rate 2.50%
Variable Rate 3.30%
1 year Fixed 3.25%
2 year Fixed 3.84%
3 year Fixed 3.99%
4 year Fixed 3.99%
5 year Fixed 3.94%
7 year Fixed 4.95%
10 year Fixed 5.15%

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Growing Old Is Mandatory ..Growing UP is Optional

Pramod Chopra
Member since: Sep 03

Posts: 1284
Location: Pickering, ON
Post ID: #PID

Posted on: 29-03-09 22:16:46

Quote:
Originally posted by AshwaniG

Hi Nightmare !
Pls check for rates as I see that 5 yrs fixed is lesser than 4 yr fixed .. I dont know if that is possible or just a typo error . I am also in mkt with almost same scenario.
AG

Originally posted by Nightmare

Hi Ashwani,

It is possible and generally 5 year rates are cheaper or comparable to 4 year fix rates. This could be because of many reasons and one of the reasons is the competition amongst various lenders. Another reason could be to offer lowe rates for quick closing to grab the market share. I am pasting below the latest mortgage rate from my website and you will see that 5 year rate is much lower than 4 year term.

1 Year fixed rate 3.25%
2 Year fixed rate 3.79%
3 Year fixed rate 3.74%
4 Year fixed rate 3.94%
5 Year fixed rate 3.82%
7 Year fixed rate 4.95%
10 Year fixed rate 5.25%
Variable Rate 3.25%
Prime Rate 2.50%

-----------------------------------------------------------------

Pramod Chopra
Senior Mortgage Consultant
Mortgage Alliance Company of Canada

Aashu
Member since: Nov 04

Posts: 1353
Location: Vaughan
Post ID: #PID

Posted on: 30-03-09 08:39:14

Pramodji : Frm ur web site , means you can get this rate for any of your clients from any bank ?

I spoke to CIBC and they r offering to all :

1. 4 .05 % for 5yrs OR
2. 4.20 % with 2 % cashback of mortgage amt (to pay penalty and keep rest).

Txs.

AshwaniG
Member since: Jul 04

Posts: 1484
Location: Convinient
Post ID: #PID

Posted on: 30-03-09 09:02:44

Hi Pramod G !
Thank you for your reply ...My mortgage will be up for renewal in Dec 2010 . I am currently paying 4.55 ..If I renew with Scotia ( my current lender ) I had been offered 4.15 for 4 yrs w/o penalty ..
Do you think that I am better off to switch to 3,84 for 5 yrs after paying penalty .
Thank you for your clarification .
AG

P.S: I have a excellent credit history ...

-----------------------------------------------------------------
Growing Old Is Mandatory ..Growing UP is Optional

gforacle
Member since: Oct 05

Posts: 103
Location: Brampton
Post ID: #PID

Posted on: 30-03-09 11:52:41

Hi Pramodji

Thanks for your response

The mortage will be 50 % variable, which I am commited with them for 5 years (but can move to fixed at any time). The other 50 % fixed is for 1 year only, and I can either repay or extend with them at my choice

Do you sense anything fishy in this?

Regards
Chetan

Contributors: Pramod Chopra(13) investpro(7) ftfl(4) gforacle(3) febpreet(3) AshwaniG(3) Ranin(3) ash_canada(3) Blue_Peafowl(3) dudewheresmycar(3) dalsania_nh(2) Nightmare(2) benparsad(1) kapilmalik(1) Aashu(1) Aurn(1) raajen(1) PakistaniEngineer(1)

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