Instant 120-day Rate Holds

ING-Rate-HoldIf one of the following describes you:

  • You’re semi-seriously thinking of buying a home in the next four months
  • You’re considering locking in your variable rate to a 5-year fixed if rates rise, but your lender won’t hold a good rate for you
  • You’re casually thinking of refinancing but prefer to wait for fixed rates to rise so that your IRD penalty falls
  • You want to hold a rate on a different term than you were pre-approved for elsewhere

…then an ING Direct rate hold might be your cup of tea.

A rate hold does just what it says: It holds you a rate for 90-120-days.

Having a rate hold is like having a free option.  For instance: assume you run out and get yourself a 3.74% rate hold. Then suppose global risks subside and the economy recovers strongly. That 3.74% rate could jump to 4.50% or more over 3-4 months. If that happens and you have a rate hold for 3.74%, you’ve saved yourself over 3/4 point.

Of all the rate-hold options out there, ING has one of the better, for four reasons:

  1. ING rate holds are free and entail zero obligation
  2. It’s really easy to get one (It takes ~60 seconds. Either you fill out the form or your mortgage planner can do it.)
  3. ING has among the best mortgage features in the business
  4. ING lets you lock in a rate for 120 days with no credit check and no application.

Things to remember:

  • A rate hold means nothing if you don’t meet the lender’s qualifications. Always consult with a mortgage professional first to confirm that you do.
  • A mortgage planner will sometimes offer you a better rate than what you can get through ING directly (The 3.74% example above is 5 bps below ING Direct’s normal rate. ING-approved brokers will sometimes do that or better). Moreover, a mortgage planner provides professional advice, full service, and hand-holding throughout the process—at no cost.
  • ING lets you extend your rate hold any time. That means you can get a brand new 120-day hold at ING’s then-current rates, anytime you want.

ING isn’t the only game in town, of course. Your mortgage planner can identify which lender has the best rate hold for your particular circumstances.

If you know for sure that you’ll be closing on a new home within 120 days, you’ll likely find cheaper pre-approvals elsewhere—albeit with more steps and restrictions.

  1. nice ,very nice…..i see another Lender try to avoid the Broker Channel….and try to do business with the Broker….very impressive!!!…..where is the end?

  2. You’ll likely want to confirm that discretion off a rate-hold….as a status broker with ING, I’ve always been told that my discount applies only to rates in force at the time of an application, not my “rate-hold rate”….
    Minor point, but worth noting.

  3. Im curouis, because i have a 1 year builders rate hold with BMO, and this was from May before the rates plummeted. Im nearing 120 days from possesion, do I simply call and request a lower rate, or do I have to requalify? Right now I have a 3 year 3.85 rate hold on a letter of guarentee from BMO for 370,000$.

  4. Thanks Whistler. You’re right. ING status brokers can offer discounts off the applicable rate at the time the deal turns live, or the rate hold rate, whichever is less.
    You’ll see some brokers nonetheless discounting rates on rate holds up-front (from their own pocket) because most rate holds are long-shots anyway.
    Cheers,
    Rob

  5. You should definitely ask for a lower rate and threaten to walk. Rate holds – TD has a 120 day rate hold with full discretions! ING isn’t the only one…

  6. I’m wondering how far down the process can I switch to another mortgage? For instance, I buy a house with financing condition and I go to CIBC who approve the mortgage for the amount I need so I can waive the condition. Can I change to another mortgage before closing if a better one comes along? I’m just wondering generally when I’m locked in to a specific vendor’s mortgage.

  7. Hi Derek,
    You should be able to do better than “just below 4 percent” if you plan to lock-in right now. Where rates will go in the short-term is a bit of a guess but, historically at least, they don’t have room to go much lower. It’s not a matter of if they’ll go up – just when.
    Sheldon knows how to reach me if you want to give me a call to discuss it.
    As Rob and Melanie have pointed out quite astutely many times in the past, the decision to lock-in or not involves some detailed analysis of your needs, risk tolerance, and personal situation.

  8. you can walk as long as you haven’t signed the mortgage docs and the lender hasn’t advanced the funds to your lawyer. If you do this it will irritate your lawyer and you’ll pay a big chunk of interest to the vendor for each day you’re late on closing. You may even lose your deposit if there is a back up offer in place and you fail to close as promised. Once you’ve signed the mortgage commitment with the lender there are usually conditions still to be met, like providing a job letter, so you can simply not meet the lender’s conditions and walk away.
    If you’ve signed off the financing condition on a purchase offer then you’re putting your deposit on the line if you’re still shopping around so late in the game. With typical lender conditions, you’re looking at 3 business days minimum to get a new mortgage arranged and get all their conditions waived and that is really pushing it. I’d recommend trying to negotiate a lower rate with the lender who you’re currently approved with. They should match another lender’s offer as long as the mortgage terms and contract are similar. Some lender’s offer a no frills mortgage that has a slightly lower rate but little or no prepayment option and usally without the option to renew early.

  9. The best 5 year rate in the country I can find today is 3.45% with Coast Capital Savings , but I haven’t had time to research the fine print so there may be restrictions on the location of the property as they’re located in the lower mainland.
    https://www.coastcapitalsavings.com/Personal/
    To the best of my knowledge, Merix, MCAP, ING, and Street Capital are all fighting for clients by offering 3.59% on a 5 year quick close through their broker channels.
    BMO has a 3.59 quick close mortgage, but when you read the fine print, it’s not worth it.
    First National is offering 3.69% through the broker channel and most other bank and non bank lenders are right on their heels with about .05%-.10% separating the pack.
    If you’re looking for a 5 year closed variable rate mortgage, I heard that Street Capital will do P -.8 but the big banks are offering P -.7 to their best customers. Keep in mind that the above rates are for clients who have good credit on owner occupied properties.. I also can’t guarantee the above as it’s based on web research this past few days. I’ve also done some research on HELOC products and right now RBC appears to have the best re-advanceable mortgage with their Homeline plan. It offers P +.5 on the LOC and for clients with excellent credit along with some arm twisting, P -.7 is possible on a 5 year closed mortgage segment. For this mortgage, you need 20% down at it’s a conventional product.

  10. I’d take National Bank’s All in One instead of the Homeline. The rate is the same and it has many more features. The best part is that it’s just like the Manulife One so you can do all your banking in it. You also save on interest by combining your debt and savings.

  11. Hi Jason,
    Jessie’s absolutely right that it may pay to shop around and/or use competitors as leverage against BMO–depending on your circumstances.
    If you’re well qualified, you’ll find 3-year terms with 120-day rate holds that are much lower than 3.85%.
    Cheers,
    Rob

  12. I heard that National Bank was being stingy with their rates due to the popularity of the All in One product. I like this product too and feel it’s much better choice than Manulife One for
    for people who still have a substantial mortgage to pay down. I like the idea of combining a mortgage segment with the interest offset capability of the LOC portion. Pay down the Mortgage segment with a regular payment. Use income to offset the interest expense of the LOC portion and it’s a great strategy but does take discipline! I’m not sure if NBC will match RBC’s Homeline rates as I don’t know anybody who deals with NBC, but at their posted rates, the All in One isn’t as competive with P +1.00 on the LOC and average discounted rates on the mortgage segment.

  13. Not talking about walking away from the deal. I’m talking about walking away from the mortgage vendor that you use to waive the financing condition. For example, I put down an offer with a financing condition. I then use a mortgage broker who gets me a vendor who approves me a mortgage for that property. I waive the condition. BUT, my closing is not for another 3 months. The next week a mortgage product comes along that is better. The current vendor will not match it. Have I signed anything in the original process to guarantee financing the first vendor that would NOT allow me to switch? I would of course offer the chance to match to original vendor but if they can’t then do I have until the day I sign all the documents with the lawyer OR will I have to sign something with respect to the mortgage earlier?

  14. BMO can’t go more than 90 days out on rate hold unless it is Builder’s Capped, I doubt you would get any better rate at this point from them.
    As above, you can call and secure a rate hold and then negotiate or switch for an approval elsewhere if you wish

  15. If it is a pre-approval to waive conditions, you can switch at any time. As Ken said above, unless you signed any mortgage documents you can shop around.
    You can actually have 2 or 3 competing offers and choose whom you wish to get your mortgage business

  16. On the face of it NBC’s All in One rates are the same as RBC. The difference is that the AIO is a way better line of credit. When you factor in NBC’s free banking and interest offsetting, the All in One’s rates are effectively much cheaper than RBC’s.

  17. Hi Derek,
    Thanks for the question. As Gord correctly suggests, there may be other terms worth considering besides a 5-year fixed. Depending on your circumstances you might find better value in a 3-year, 1-year, or hybrid term. It’s tough to say without more info on you, but your mortgage advisor should be able to run the numbers and make a proper recommendation.
    Cheers,
    Rob

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