Hi,

For example if I got a fixed rate mortage from TD and another one from RBC - both have the rate of 4.59%

would they both be allocating the same portion towards interest and principal - every year.

Or does each company have its own formula as to how the payment is split [towards interest and principal]

Quote:

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Originally posted by birentoronto
For example if I got a fixed rate mortage from TD and another one from RBC - both have the rate of 4.59%

would they both be allocating the same portion towards interest and principal - every year.

Or does each company have its own formula as to how the payment is split [towards interest and principal]

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"Mah deah, there is much more money to be made in the destruction of civilization than in building it up."

-- Rhett Butler in "Gone with the Wind"

Excellent reply.

Quote:

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Originally posted by ashedfc

4.59% seems to me as a fixed rate mortgage. You can easily get a prime -0.5% Variable mortgage (that is 2%), & have a fixed monthly payment. So, if the interest goes up, your payment stays the same (they just increase the amortization). Off-course, there is a certain threshold, after that the payments will go up.
This way you will have a 2% interest & you can continue to pay the same monthly payment which you would have paid at 4.59%. The benefits are-
1. Your interest rate is low
2. You have a less monthly payment.
3. You are paying a lot extra towards the principal (almost 2.59% extra).
4. If things goes worse & you loose your job, or get serious illness, you can always revert back to minimum payment (rather than risking foreclosure).
5. If interest rate goes up than your amortization will increase (keeping the same payment): Seriously are you going to live in the same house for 35yrs. Very rare, mostly people sell the house long before the amortization is complete.
6. If interest rate rises, they will rise gradually because of deficit funding in major economies, & if they increase too fast, then they will cause the next recession & in almost all recessions interest rate will start going down back again.
7. Even if it rises, by the time it reaches 4.59%, major duration of the 5yr will be over.

So, you are your own boss. Do your calculation, & make a decision. Its important to sit with a Financial Planner & understand your implications of your decision.
Once you sign the papers, there is a sizable penalty to exit your mortgage. Last year we came across a lot of cases where the penalty was $17000 on a $400000 mortgage (based on the IRD calculation).

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I have several credit cards which is adding to my profile unnecessarily; If I close them soon - will it improve my credit ratings -> hence increase what I can borrow?

How long does it take in the pipeline to have an effect?

June is a poster child for Real Estate Industry.

CALGARY:

if you are a home-buyer who is looking forward to lower prices in the fall. For the first 23 days of June, sales are 39% lower than last year, and 34% lower than the historic average.

http://www.bobtruman.com/blogs/bob_truman/archive/2010/06/24/great-summer-ahead.aspx


http://www.greaterfool.ca/2010/06/27/fiduciary-duty/#comments

Don't sign any BRA (Buyer Representation Agreement).

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Real Estate Board's Spin: Everyone is on vacation so we are expecting this kind of low sale. but market will high in fall. Hey its right time to buy because prices are low and interest rates are low too. You will see your RE will appreciate 10% by end of the year.

June 2010 data:

Sales of single family homes were down 42% compared to Jun 2009.

Sales of SFH are down 35% compared to the historic average for Jun.

SFH Inventory on Jun 30 was 5990, which is 76% higher than last year.

New listings at 2733 were up 22% compared to last year.

http://www.calgaryherald.com/business/Crummy+June+sees+home+sales+slide/3230920/story.html

http://www.bobtruman.com/Whats_New/page_1691541.html

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How do our CD experts see the market in coming fall?

Hi,

I went to TD's Mortage Payment Calculator.

http://www.tdcanadatrust.com/docs/mortCalc/MortgageCalculator.jsp

Say I want to borrow $200,000, with Bi-Weekly payment frequency, Amorization of 25 years.

The challenge is that I have a quoted variable interest of P - 0.6, but in the "Select Term" option - the only options I see are:

6 Month Covertible
1 Year Open
1 Year Closed
2 Year Closed
3 Year Closed
4 Year Closed
5 Year Closed
6 Year Closed
7 Year Closed
10 Year Closed


whereas, I have a variable closed for 5 year (rate been P-0.6)

Any ideas?