TD bank increases some mortgage rates

TD Canada Trust (TSX:TD) is raising medium-term mortgage rates by up to half a percentage point while lowering some shorter-term rates effective Wednesday.

The rate for five-year closed mortgages, one of the most commonly chosen by Canadian homeowners, goes up 0.4 percentage point to 5.85 per cent.

That's on top of a 0.2-point increase in the five-year rate announced last week by TD and several other major banks.

Analysts have noted that rates for mid-to long-term mortgages are going up in response to higher yields being paid on bond markets, where lenders finance much of their mortgage business.

The biggest change announced Tuesday by TD will be with three-year closed mortgages, which will rise by 0.5 percentage point to 4.65 per cent. The posted rate for four-year closed mortgages rises by 0.3 point to 5.14 per cent.

TD is lowering its six-month convertible mortgage rate by 0.15 point to 4.6 per cent while its one-year close mortgage rate falls 0.15 point to 3.75 per cent.

The short-term rates are influence more by the Bank of Canada's policy rates, which are at a historical low.

Canada Mortgage Rates Not Likely to Fall

Mortgage rates in Canada, which have plunged by almost 50 percent in the last year, aren’t likely to fall further, said Phil Soper, chief executive officer of Brookfield Real Estate Services Fund.


“Certainly with the Bank of Canada’s target rate set at virtually zero, there’s very little room,” Soper said today at a conference in Toronto on Canada’s real estate market. The rate is “the lowest it’s been in anyone in this room’s lifetime.”

Rates for home loans have been dropping during the biggest financial crisis since the Great Depression, with some lenders offering mortgages approaching 4 percent, Soper said. That compares with an average posted five-year rate of 7.5 percent a year ago, according to the Bank of Canada. He added that home prices in Canada aren’t likely to rise “sharply” over the next two years.

Bank of Montreal, which sponsored the conference, lowered its rate for a five-year fixed-rate mortgage this month to 4.15 percent.

“We are approaching almost zero interest rates,” at the Bank of Canada, said John Turner, the Toronto-based bank’s director of mortgages. “The question becomes, how much upward pressure will there be as we come out of this recession?”

The Bank of Canada last month cut its benchmark lending rate to 0.5 percent, its lowest ever, and said it’s preparing to use policies beyond interest rate moves to revive an economy hit by a recession and tight credit markets. The next rate announcement is April 21.

Canadian existing home sales rose in February for the first time since September as buyers took advantage of lower mortgage rates and prices, according to the Canadian Real Estate Association’s Multiple Listing Service. Sales of existing homes rose 8.6 percent from January to28,669 units.

Bank of Montreal senior economist Sal Guatieri predicted that Canada’s housing market will decline further this year, without the “crash” experienced in the U.S.

Best Mortgage Rate

Buying a home is an expensive endeavor so getting the best possible mortgage rate should be one of your main priorities. By deciding to get the best mortgage rate in Montreal possible you will be making a positive decision to help you for many years to come. However, just deciding to get the best Canadian mortgage rate available is not going to get you the best mortgage rate available. Instead, you will need to learn the tips and tricks for negotiating with your mortgage lender in order to receive the best possible mortgage rate for your personal situation.

Mortgage Rate Tip #1
Your mortgage rate might be low in your mind, but you must take the origination fee into account as well because this can increase your APR. Lenders frequently charge 1%, but you can always negotiate the mortgage rate origination fee lower. Also, if the origination fee is much higher than 1% you need to either negotiate it down, or find another lender with a more favorable overall mortgage rate.

Mortgage Rate Tip #2 Lock in the Rate
When negotiating your mortgage rate, make sure your lender is prepared to lock in your rate for at least 30-60 days. This way you will be guaranteed a particular rate even if rates skyrocket the next day. Another not trick many individuals are not aware of is to include a clause that also will allow you to take a lower rate if rates fall during this period. This is a great mortgage rate tip because you get your mortgage rate locked in so it can’t go any higher, but if the average mortgage rate goes lower you receive the lower rate.

Mortgage Rate Tip #3 Fight
If the mortgage rate drops significantly and you have already signed a deal locking in a particular mortgage rate and don’t have a clause that ensures you will receive the lower rate, then you need to fight. You simply need to call your lender and say that while you signed the lock in agreement you want the lower rate. This will take some negotiating, but your lender wants you business and might be willing to negotiate the mortgage rate with you.

Need a Mortgage Broker

For many people, mortgage payments are their single largest expense. Yet, when financing a home, most Canadians don’t comparison shop to ensure they’re getting the best mortgage rate Montreal and terms available. This mistake can cost homeowners tens of thousands of dollars over the course of their mortgage.

Here are seven ways mortgage brokers can help:

Access to competitive rates

Brokers deal with multiple competing lenders and can often access exclusive rates. Based on the number of mortgages brokers complete each year, they also have the power to negotiate rate discounts from lenders, which can be passed on to their clients.

Free service

Mortgage brokers’ services are typically available at no cost to consumers. Brokers are paid by the lender selected by their clients.

Knowledgeable advice

Brokers offer consultative service, advice and solutions that are customized to each client’s needs. And unlike banks, brokers work for you.

Speed and convenience

Brokers will work around a client’s schedule to make the transaction as easy and convenient as possible.

Pre-qualification

Whether you’re shopping for a new home or refinancing your existing mortgage, a broker can help you obtain a pre-approved mortgage, often with up to a 120-day interest rate guarantee.

Preserved credit rating

When you shop for a mortgage, there is an accumulation of lender inquiries on your credit bureau report, possibly affecting your credit rating and, ultimately, the rate and terms of your mortgage. This isn’t the case with a mortgage broker, who only does one inquiry yet can still get many competing lenders to quote on your business.

Peace of Mind

The Canadian Association of Accredited Mortgage Montreal Brokers has a stringent Code of Ethics that members are required to adhere to in order to retain membership.