Mortgage Renewal - Scotiabank

[MortgageQueen]

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.

You did do an excellent job Lindsey. When is your renewal? The reason I ask is that the Bank of Canada "may" drop the rate again in March. . .at least that's the rumour.
I can assure you it's incredibly unlikely your bank would not still offer you the same deal at that time because it they don't. . . someone else will.
But if your maturity date is after mid March, you may get an even better rate. Conversely, if you can't wait, why not go for a variable rate which are around the 2 percent mark right now. If the rate drops in March or April, you'll still reap the benefits.

[angel_2011]

Thoughts on Scotia's Ultimate Variable Rate mortgage - 3 yr closed...? (initial annual interest rate = 2.60% - CAP = 3.39%)

[tjthemanto]

Thoughts on Scotia's Ultimate Variable Rate mortgage - 3 yr closed...? (initial annual interest rate = 2.60% - CAP = 3.39%)

I don't know about this particular MTG.

But in general right now variable MTG is definitely a better choice than fixed rate for the 2-3 yrs ..the way the economy is going , I don't see any increase in the variable rate or prime rate in the next 2-3 yrs.

In fact they are saying the Prime rate ( overnight rate ) is going to be reduced by another 0.25 % by Bank Of Canada..so commercial banks should follow.

So unless you are getting a really good fixed rate , you might as well go for the cheaper variable rate.

[MortgageQueen]

A capped rate variable is a bit more expensive because it caps the extent the variable will go (or guarantees it to go no higher) but I agree with TJmanto. Rates are showing no sign of going up. Just the opposite.

[tjthemanto]

A capped rate variable is a bit more expensive because it caps the extent the variable will go (or guarantees it to go no higher) but I agree with TJmanto. Rates are showing no sign of going up. Just the opposite.

Yup

Even traditionally I think in the last 15-20 yrs , people who took a Variable MTG in most cases have come out ahead in place of people who took FIXED MTG.

Sometimes just due to your own fears & not taking a risk type mentality you end up paying a higher rate..just to have a so called peace of mind

[valuemortgage]

Yup

Even traditionally I think in the last 15-20 yrs , people who took a Variable MTG in most cases have come out ahead in place of people who took FIXED MTG.

Sometimes just due to your own fears & not taking a risk type mentality you end up paying a higher rate..just to have a so called peace of mind

Just to throw a wrench here... keep in mind that in the past the gap between a 5y fixed and 5y variable was considerably bigger than what it is today. I agree that variable is a great option, for those who can handle the ups and down along the term and average out a better rate... but if we had a 1% or 1.50% spread between fixed and ARM, this decision would be much easier. Fixed rate mortgages are extremely popular (in general) and given the silly low 5y fixed rates people can get now, the decision is a tough one.
On that note, my own mortgage is variable, and I never had a fixed rate myself.

[Dan in Canada]

I negotiate for a lower rate at the local branch in person and always manage to do better than their initial offer in the renewal letter

[MortgageQueen]

I negotiate for a lower rate at the local branch in person and always manage to do better than their initial offer in the renewal letter

Yes, you're right. that's pretty much always the case.

[angel_2011]

so I got my mortgage renewed with no problems - I was soooooooo nervous! but all they did was print paperwork and had me sign it.

Thanks to everyone who helped me out in this thread. It is such a blessing to be able to come on SC and get valuable advise from wonderful members like yourselves (especially when there is no where else to turn). Thank you once again from the bottom of my heart. Have a great day!!

[Colsgirl]

so I got my mortgage renewed with no problems - I was soooooooo nervous! but all they did was print paperwork and had me sign it.

Thanks to everyone who helped me out in this thread. It is such a blessing to be able to come on SC and get valuable advise from wonderful members like yourselves (especially when there is no where else to turn). Thank you once again from the bottom of my heart. Have a great day!!

Can I ask you if you went with fixed rate? If so what term and what rate? We have just over a month to go until we can renew!

[angel_2011]

no, i went with their variable.... i will pm u with details

[tjthemanto]

no, i went with their variable.... i will pm u with details

Yeah ..good decision .don't see the rate going up in the next 2-3 yrs , economy is in the dumps. You can always lock in , if you think its going up ..I think without penalties, I believe.

[dougboswell]

Before you go with the variable you need to ask the lender if you were to convert to a fixed at some point in the future what is the minimum term you can go with and would the interest rate be at their posted rate or their discounted rate

[Colsgirl]

I am always ultra cautious because I remember the interest rates in the nineties! I bought my first house and the variable rate was 10% when I got the keys in the morning, by lunch time the rate had gone up to 15% (one of my work colleagues said welcome to home-ownership!) and by the end of the day the rate closed at 12%. I have to tell you, my first day, my first home and I was sweating! That was in the UK, but I think the markets were pretty volatile the world over.

[mandolinatou]

Why? It's never great to have to break your mortgage from my understanding.