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.
I assume this does not affect existing mortgages, only new products. This would raise the cost of capital and perhaps slow the housing market.
Hi Sam, That’s right. Existing mortgages should be unaffected.
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.
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.
I got lucky and got my mortgage from Scotia Bank on the 18th for 4% (prime – 0.75%), a great deal.
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.
Bob that is interesting. Two weeks ago Scotia was only advertising prime less .35% if I recall.
The best tip is:
“If you need a variable rate mortgage in the next 120 days call a mortgage planner now”.
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
Desjardins and CT can do much better than Scotia.
Very true Brian. Discounts disappeared on two more open variable mortgages today…
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)
“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?