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This week on RateSpy TV:
- Conventional Rate Discounts Squeezed: If you’ve got 20% to 34.99% equity, the lowest available rates have risen. The Spy tells you why.
- NEW! Refinance Finder: The best mortgage rates on refinances are not the same as the best rates on purchases and switches. Most rate sites don’t differentiate between them. RateSpy.com’s new refinance filter finds you rates that actually apply to refinances. We’ll show it to you.
- Rate Surveillance: Bond yields dip back down, keeping fixed rate hikes at bay.
- Stars & Dogs: This week’s picks and pans in the mortgage rate market.
11 Comments
I have to say I now look forward to these videos every two weeks – hopefully one day we’ll see them on a weekly basis.
And bravo on the refinance filter. It’s a welcome addition for those of us whose homebuying days are behind us.
I’d like a filter for high-ratio (to exclude them).
Hi Ralph, Enter a Mortgage Size that is 80% or less of the Home Value and it will eliminate the high-ratio rates.
So the takeaway from the latest mortgage changes seems to be that costs are going up for most mortgage types. I get the need to cool housing in a few select markets, but is raising the cost of home ownership really the best way to go about it? It always seems like when government seeks a solution to something, all roads lead back into my bank account.
I don’t understand why every site doesn’t have a refinance selector. How are you supposed to find a rate for a refinance otherwise?
Thanks for the clarification on the mortgage search. One more question. Is a switch considered the same as a refinance? i.e. is the refinance filter just excluding mortgage offers that are only available at the time of purchase?
Hi Ralph — A switch is basically where you move a standard mortgage from one lender to the other with no changes to it.
A refinance is different because something is changing: the loan amount is increasing, the amortization is increasing, the loan-to-value is increasing, someone is being added to title, the registration of the mortgage is changing, etc.
The “Available for Refinances” filter simply checks to see if a rate is available on refinances. The rates that appear in the results may only be applicable to refinances, or they might apply to refis, switches and purchases.
Rob, based on your description, if someone has a collateral charge mortgage and at the end of their term they want to switch to a conventional mortgage at BMO, it would be considered a refi, even if the mortgage principal balance stayed the same?
Hi Ralph — If the person had a collateral charge with a line of credit, it’s a refi for sure.
If the person had a collateral charge mortgage without a line of credit, most lenders would still do it as a refi with the associated fees. With respect to BMO specifically, I’ve heard of them covering the legal/appraisal fees in such cases, so talk to the bank directly to confirm.
Rob – CMHC doesn’t consider a collateral charge switch to be a refi (ie: default insurance survives). I think it’s important to note that the lenders themselves consider it a refinance as a convention, rather than a rule. This is a shame because they’re double dipping: charge the customer a higher rate because of “new regulations” (notwithstanding that it’s not, in-substance, a refinance) and keep the default insurance in place. Very sneaky in my opinion. I can confirm that if incoming lender is willing to play ball, a collateral charge can be assigned.
Hi Nikola — Thanks for the note. That’s true regarding CMHC. From a consumer perspective, what people need to remember is that very few lenders do free switches with collateral charges. The customer almost always gets hit with legal fees to re-register the mortgage. And lenders have valid reasons for re-registering another lender’s collateral charge. This was true long before the new regulations came into effect. Fortunately, there seems to be a few more lenders covering refi fees for collateral charges, but there’s no free lunch. Their rates are usually higher and some of these refi rebates are considered “cash back,” which must be repaid if the borrower breaks the mortgage early.