The question becomes what will the rate be that I will be locking in to?  Obviously, we can’t predict the precise rate, but we can discuss the basis for how that rate  is set, and whether it is based on discounted rates, or posted rates….. some examples:

TD – Loan officer’s discretion based on how strong they feel your relationship is with the bank. 1% off posted is guaranteed in year one.  Read here about the costly effect of all TD mortgages being Collateral charges!

CIBC - The discount originally offered on your variable rate mortgage (VRM) is what will be applied to their fixed posted rates.

Scotia Bank – Loan officer’s discretion based on how strong they feel your relationship is with the bank.

BMO - Loan officer’s discretion based on how strong they feel your relationship is with the bank.

Royal Bank - Loan officer’s discretion based on how strong they feel your relationship is with the bank.

HSBC - Posted open rate after 3rd year.

We offer clients mortgages with the ability to convert to a fixed rate at the best discounted rates available at the time, rather then relying on the “Loan officer’s discretion”, and the difference between locking in at the posted rate vs the discounted rate cannot be overlooked.  This difference could cost $18,000 in additional interest in just 5 years on a $250,000 mortgage amortized over 25 years.

As always, please Contact Us if you have any mortgage related questions.