Mortgage Renewal - Scotiabank

[tjthemanto]

I'm fixed rate with renewal in October 2016 at 3.89% so the penalty may be too high?

Mortgage penalty calculator :

http://www.ratehub.ca/penalty-calculator

Costs of refinancing

http://www.ratehub.ca/cost-of-refinancing

[tjthemanto]

I have a Lender offering 2.69% for a 5 year term already.

Wow great rate for a Fixed rate

[super807]

so i got my renewal offer in the mail - 5yr fixed is 4.79% - should I just take that or call them up at the end of Jan/beg Feb to see if I can get a better rate?
If I do ask for a better rate - would I be opening myself up to a credit check/employment verification?

If instead of accepting the 5yr fixed - and I sign for the 3yr or 2yr... am i still opening myself up for the above?

Angel, we got our renewal notice two years ago, with a ridiculous offer (t was CIBC). We then told the bank that we wanted a 2.99% rate or we were going elsewhere. They got back to us within a couple of day with the 2.99%. We did not have to go through any checks. The only thing we had to do was sign the new mortgage papers.


That said, I have since learnt quite a bit and would not go with CIBC (or any of the big banks) again.

Our original mortgage was with First Line, which got absorbed by CIBC. The terms and conditions on the first mortage remained the same as the First Line ones when CIBC took over. Now we have CIBC terms and conditions. These include:
- they would use the original rate of 5+% they offered us (their posted rate at the time) if we were to break our mortgage, rather than the 2.99% rate we pay.
- Also, we can only make extra payments equalling up to 10% per year, not the 15% we had before. This isn't the end of the world right now as not likely to be able to make extra payments of more than 10% per year during this term. But next one, I will want 15%.

We are not likely to want to break our mortage during the next three years, as we won't want to move unless we move to a new community for work purposes. And I have a three year plan in my current job that will keep us here. Of course, that doesn't stop unforseen things from giving us a reason to break mortgage like illness, death or other. We should be okay if faced with job loss, as we have weathered before, understand the ins and outs, and most importantly, we bought less than we could afford, so we have a fair amount of wiggle room, as well as a very healthy emergency fund, and other savings. And no other debt. I won't borrow money to do renos, and we plan to buy cars outright in future, not finance them.

[MortgageQueen]

Wow great rate for a Fixed rate

Yes, It's strictly a broker rate.

[Colsgirl]

We have two months and counting until we can get a new fixed rate with Scotia (you can renew up to 6 months before the end of the 5 yrs without penalty - we did it at the 4.5 year last time). I am really hoping for a good rate. We will only want 4 year fixed rate this time.

[MortgageQueen]

We have two months and counting until we can get a new fixed rate with Scotia (you can renew up to 6 months before the end of the 5 yrs without penalty - we did it at the 4.5 year last time). I am really hoping for a good rate. We will only want 4 year fixed rate this time.

Colsgirl, I'm curious as to why you seem inclined to automatically renew with Scotia. Scotia is generally not the cheapest rate Lender by any means.

[Colsgirl]

Colsgirl, I'm curious as to why you seem inclined to automatically renew with Scotia. Scotia is generally not the cheapest rate Lender by any means.

Because they earned my loyalty. They gave us a mortgage and credit card when we moved to Canada and no one else would (because we had no credit rating here).

[tjthemanto]

Because they earned my loyalty. They gave us a mortgage and credit card when we moved to Canada and no one else would (because we had no credit rating here).

They will still match it or come close if you show them other lower rates. They usually don't want to lose your business.

[lindseyc]

My mortgage is with CIBC, they just sent me an early renewal notice and with the 4 year fixed that I am looking for, they initially offered me 2.93%. I called them and asked for a more competitive rate and I am now just waiting for them to get back to me.

I am looking for 2.75 - 2.8% and I will be happy to stay with them since I have never had an issue with them. I am also open to leaving them if I don't get what i want, and I think i made that pretty clear. I find you just need to educate yourself a little bit on current rates and the process and you also have to speak with confidence and not let the bank intimidate you.

[Colsgirl]

My mortgage is with CIBC, they just sent me an early renewal notice and with the 4 year fixed that I am looking for, they initially offered me 2.93%. I called them and asked for a more competitive rate and I am now just waiting for them to get back to me.

I am looking for 2.75 - 2.8% and I will be happy to stay with them since I have never had an issue with them. I am also open to leaving them if I don't get what i want, and I think i made that pretty clear. I find you just need to educate yourself a little bit on current rates and the process and you also have to speak with confidence and not let the bank intimidate you.

That is exactly what we do, we don't take the first rate that they offer. They always come back with a better offer - if you are a good customer and pay on time, don't cause them any work, they want to keep you. You make them money for doing very little!

[dougboswell]

Lindseyc: If you go to ratespy.com and plug in your province and 4 year fixed you will see that all the big banks are offering (in Ont) 2.79% and some brokers are offering even less. You did not say when your mortgage comes due.

[MortgageQueen]

There's also a Lender giving 4 year at 2.79 with $250 back.

[valuemortgage]

Just to add another point to what others already mentioned : be careful about early renewals. Banks love to send early renewal offers to their clients, and often present something saying "if you dont take it right now, the offer will expire in 1-2 days". Reality is, the banks know there is zero competition at the time they send that early renewal offer, as the client cannot compare to offers elsewhere since it would cost him/her quite a bit extra in penalties and other fees. But do the proper calculation before you make a decision, as the potential savings of renewing early may easily be eaten by the "slightly" higher rate (when compared to more competitive lender on the broker channel, for example) your bank is giving you.

My mortgage is with CIBC, they just sent me an early renewal notice and with the 4 year fixed that I am looking for, they initially offered me 2.93%. I called them and asked for a more competitive rate and I am now just waiting for them to get back to me.

I am looking for 2.75 - 2.8% and I will be happy to stay with them since I have never had an issue with them. I am also open to leaving them if I don't get what i want, and I think i made that pretty clear. I find you just need to educate yourself a little bit on current rates and the process and you also have to speak with confidence and not let the bank intimidate you.

[lindseyc]

Hi all, thanks for the good points. I am in no rush to "early renew" but I did take the opportunity to negotiate with my bank and see what they would offer me (as well as look around at other rates) I have negotiated down from 2.93% to 2.69% which is actually a little lower then I thought they would go.

At this time I am bundling the remainder of my home equity balance (3.85%) with my mortgage, so to move elsewhere I would be paying double the fees since it is basically a second mortgage. I also convinced them since I am such a stellar customer that they should wave the legal fees for breaking and merging, which would normally be $945.

I have not been offered a 2.69% rate or lower from any of the other major banks yet, but I am going to contact a broker as well. I told the bank I am not in a rush and although their offer has an expiry date on the letter, they are giving me a few extra weeks since I am shopping around and they want to keep my business.

Did I do everything right? This is the first time I hardcore negotiated anything this major and I feel like I am standing my ground well and potentially saving some money.

[valuemortgage]

If you have a mortgage plus Heloc this would be treated as a refinance by any lender, and the cost to do so would be around $1000.00 ($700.00 for a title company plus some $300.00 for a discharge fee), then you could get a single mortgage elsewhere for the total amount.
Im not trying to take your credit for negotiating the rates, but the reason why it went down so much is because the bonds have dropped dramatically over the past few days, and banks and other lenders are now in a rate war. For example, I got emails from 4 different lenders today alone, all offering lower rates than last week. Currently, you can get a 5y fixed at 2.54% with decent pre-payment terms (20%+20%). That difference of 0.15% (compared to your current bank) over the entire term means 0.75% in interest savings. Depending on the mortgage amount, it may be more than the legal costs to switch out.