« Bailout Dead. Markets Plunging. | Main | Major Whipsaw Moves »
Popular lenders ING and MCAP are now the latest to announce they are eliminating discounts for variable rate mortgages. After midnight tonight they will be at prime.
There are now exceedingly few places to get good discounts on variable-rate mortgages. Hopefully this is a short-term phenomenon but there is no way to know when the big discounts will come back.
If you need a variable rate mortgage in the next 120 days call a mortgage planner now.
You can follow this conversation by subscribing to the comment feed for this post.
This is only a preview. Your comment has not yet been posted.
As a final step before posting your comment, enter the letters and numbers you see in the image below. This prevents automated programs from posting comments.
Having trouble reading this image? View an alternate.
Canadian Mortgage Trends (CMT) delivers the latest mortgage news in Canada for homeowners, online mortgage brokers, and real estate professionals. Legal Information: Consult a qualified mortgage advisor before making any mortgage decision based on information you read here. Similarly, if you see a financial or tax strategy discussed here, always consult a licensed and qualified investment or tax advisor to ensure the strategy is right for you. Mortgages, investment, and tax strategies mentioned on this website are not appropriate for everyone. In many cases, they may not be feasible at all and/or entail serious risks. While reasonable effort is made to ensure the accuracy of information and data contained herein, accuracy, facts, completeness, and suitability can not be guaranteed. Past performance is not a good predictor of future performance. Results, rates, strategies, and terms are not guaranteed and CMT and its affiliates assume no liability for any losses that may occur from your reliance on such information. The information on this site reflects purely our opinions, and not necessarily the opinions of any other party. CMT is a news site, and not affiliated with most of the people or companies mentioned. Information herein is not intended to be, nor does it constitute, mortgage advice, investment advice, tax advise, financial advice, recommendations, or solicitations to buy or sell securities. CMT personnel and related parties may have an interest in the mortgages, services, companies, products, or securities mentioned on this site. Please contact us if you require clarifications of the above. CMT is owned and operated by McLister Enterprises Inc. Contact us at (800) 280-2460. Thank you for reading CMT. Copyright 2009. All rights reserved.
I assume this does not affect existing mortgages, only new products. This would raise the cost of capital and perhaps slow the housing market.
Posted by: Sam Luu | September 29, 2008 at 09:20 PM
Hi Sam, That's right. Existing mortgages should be unaffected.
Posted by: Canadian Mortgage | September 29, 2008 at 10:00 PM
Thanks to this website I did call ING last night to renew my existing Variable mortgage with them. Had to call twice and stay on hold for about 40 minutes. Because it was a renewal they did give me 4.15% (Prime - 0.60%) since that was the best Variable rate in the 120 days before renewal.
Posted by: Jason | September 30, 2008 at 05:29 AM
I was just on MCAP's site yesterday and noticed that their advertised discount had changed at some point to P-0.40%, down from the P-0.60% I got in July. Now it's completely gone - wow. No complaints about the current 4.15% rate, considering the way things are going now.
Posted by: Brent | September 30, 2008 at 05:56 AM
I got lucky and got my mortgage from Scotia Bank on the 18th for 4% (prime - 0.75%), a great deal.
Posted by: bob | September 30, 2008 at 06:57 AM
This once again demonstrates the stupidity of borrowing at BA's and lending based on bank prime. Every time the spread between BA's and prime compresses lenders drop their discounts. So a short term compression effects the interest paid over the life of a 5 year ARM. If banks lent out at one month BA's then they could leave the spread static. And when BA's drop then borrowers would get the benefit of it.
Posted by: john | September 30, 2008 at 07:25 AM
Bob that is interesting. Two weeks ago Scotia was only advertising prime less .35% if I recall.
Posted by: Jim | September 30, 2008 at 08:28 AM
The best tip is:
"If you need a variable rate mortgage in the next 120 days call a mortgage planner now".
Posted by: Brian Poncelet, CFP | September 30, 2008 at 04:19 PM
Those who are not pre-approved have missed the boat on discounted variable. The only lender offer ing a discount today is Scotia at Prime less .25. This will disappear over the next 2 days. Move fast if you are in the market.
Jim
Posted by: Jim | October 01, 2008 at 01:07 PM
Desjardins and CT can do much better than Scotia.
Posted by: Peter | October 01, 2008 at 01:25 PM
Very true Brian. Discounts disappeared on two more open variable mortgages today...
Posted by: Canadian Mortgage | October 01, 2008 at 06:55 PM
Two mortgage specialist in Downtown Toronto are offering Prime minus 0.76%..call them ans ask for James or Dorothy...Unbeatable!
(Editor Note: Dan, Had to remove the phone number as this forum isn't meant for unfiltered promos. Otherwise it would be overrun with spam and commercial posts. If you have a great publicly accessible deal to share then email info@canadianmortgagetrends.com. We'll confirm and then post for all to see if it's legit. Thanks for your understanding. - Rob)
Posted by: Dan | October 03, 2008 at 02:04 PM
"This once again demonstrates the stupidity of borrowing at BA's and lending based on bank prime. Every time the spread between BA's and prime compresses lenders drop their discounts. So a short term compression effects the interest paid over the life of a 5 year ARM. If banks lent out at one month BA's then they could leave the spread static. And when BA's drop then borrowers would get the benefit of it."
John. I'm not sure I see the difference. If BAs go down lenders will offer bigger up-front discounts off prime. People will then benefit from those larger discounts over their entire term. It should all equal out over the long run. No?
Posted by: Scott | October 04, 2008 at 04:48 PM