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PostPosted: Mon Jan 14, 2013 12:39 am 
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It recently ocurred to me that I could consolidate our LOC with our mortgage. Our LOC is at prime + 1 (so, 4%), and mtge is 3.75% (5yr fixed, due Aug 2015).

PC has offered 3.24% (no frills), 3.29% (w/PC points).
The PC rep I spoke with is guestimating (not guaranteeing these amounts, understandably) that breaking the mtge would cost about $1000-$1500, possibly. She bases that on the assumption that TD would not use IRD as TD's rates right now are higher than the rate we have for our mtge. *i have yet to confirm this with TD*

Consolidating the LOC and mtge, with this new rate, would raise our mtge amount by a measely amount each month, and garner a better rate for a new 5yr term, while reducing our whole debt.

Crunching the numbers as much as I know how, they look good
What my question is, is PC a 'good' bank for a mortgage. I've had banking accounts with them for ages, and the LOC for 2yrs now. I've had no complaints thus far. But I do want to get people's experiences before I make a decision.

Thanks!


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PostPosted: Mon Jan 14, 2013 8:35 am 
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Give me a call. I can have a look at the TD penalty.

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Christina Jackson
Mobile Mortgage Specialist
TD Canada Trust
T: 647 292 7597
F: 905 377 1634
P: 866 767 5446
email: christina.jackson@td.com


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PostPosted: Tue Jan 15, 2013 1:25 pm 
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While I don't know your outstanding mortgage balance, the penalty you are being quoted really sounds insanely low and I would be amazed if you got away without paying the IRD. Almost non-existent in today's day and age. Here is a link to TD's penalty calculator which will give you a much more accurate idea of what your penalty will be: http://prepayment.tdcanadatrust.com/get_started.html

Also, both 3.24% and 3.29% for a 5 year fixed are INSANELY high in today's market. You can still get a 5 year fixed with full prepayment privileges for as low as 2.84%. On a $300,000 mortgage amortized over 25 years, the difference between 3.24% and 2.84% translates into a savings of $5,936.50 over your 5 year term.

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Paul Meredith
Mortgage Broker
CityCan Financial (est 1976)
416-409-8009
http://www.easy123mortgage.ca
paulm@citycan.com
Lic#10532

Follow me on Twitter! http://www.twitter.com/paulmeredith


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PostPosted: Tue Jan 15, 2013 1:34 pm 
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Yes. I have just found out that PC was wrong. I'd thought it was too good to be true, but I'll confess I did get my hopes up a little.


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PostPosted: Tue Jan 15, 2013 2:03 pm 
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Great response Paul....on both!! :D

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Christina Jackson
Mobile Mortgage Specialist
TD Canada Trust
T: 647 292 7597
F: 905 377 1634
P: 866 767 5446
email: christina.jackson@td.com


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PostPosted: Wed Jan 16, 2013 8:12 am 
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Thanks Christina :)

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Paul Meredith
Mortgage Broker
CityCan Financial (est 1976)
416-409-8009
http://www.easy123mortgage.ca
paulm@citycan.com
Lic#10532

Follow me on Twitter! http://www.twitter.com/paulmeredith


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PostPosted: Tue Apr 23, 2013 8:54 pm 
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What about not consolidating your LOC with the mortgage, but getting a secured LOC instead? or is your LOC already secured by your mortgage (the rate seems pretty great for the LOC).


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PostPosted: Wed Apr 24, 2013 7:30 am 
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NewVillager wrote:
What about not consolidating your LOC with the mortgage, but getting a secured LOC instead? or is your LOC already secured by your mortgage (the rate seems pretty great for the LOC).

The problem with just getting one secured LOC is that the rate is significantly higher. Prime +0.50% is the going rate right now for HELOCs. You are much better off either splitting the mortgage between fixed and HELOC where your fixed portion would be as low as 2.84% and your HELOC portion at prime + 0.50% (3.50%).

If you don't need the flexibility of a HELOC and you don't want a collateral mortgage, then you could refinance to a 5 year fixed mortgage only for as low as 2.64% right now.

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Paul Meredith
Mortgage Broker
CityCan Financial (est 1976)
416-409-8009
http://www.easy123mortgage.ca
paulm@citycan.com
Lic#10532

Follow me on Twitter! http://www.twitter.com/paulmeredith


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PostPosted: Wed Apr 24, 2013 9:35 pm 
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But if your mortgage is already locked in, then isn't getting a loc secured by it the only way to get some credit at a better rate? if you call up a bank, they're not just going to let you throw additional debt in with your mortgage? The prime plus half or even one can be much lower than the going rate for an unsecured regular loc.


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PostPosted: Thu Apr 25, 2013 5:22 am 
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Are you talking about keeping the fixed portion of your mortgage in place and then getting a line of credit in second position (second mortgage)? If that is the case and you have the equity in your home, then you can talk to your bank about it. Mortgage brokers don't have second position LOCs available to them, so you need to check with your bank and see what they can offer you. The rate may be higher due to the second position, but that is what you need to talk to your bank about.

If you like the idea of having additional credit available to you, then getting set up with a fixed/LOC combo is the best way to go as you get the best of both worlds. A low rate on the fixed portion and the flexibility on the LOC portion. It wouldn't make sense to do the entire mortgage as a LOC due to the higher rate. Another option would be to go with a lender such as TD or National Bank that does collateral mortgages. It is in these situations where the collateral mortgage can actually work in your favour as you can apply for a secured line of credit and have it given to you at no charge with no registration fees. This is providing you are approved for it of course. I had one client with TD that was in this position and they turned them down for it and because TD had locked up all their equity, the client was left stuck and in a bad position at that. That is the ugly side of it. Always best to get the LOC up front and that way you know you have it for when you need it.

Does this help clarify and better answer your question?

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Paul Meredith
Mortgage Broker
CityCan Financial (est 1976)
416-409-8009
http://www.easy123mortgage.ca
paulm@citycan.com
Lic#10532

Follow me on Twitter! http://www.twitter.com/paulmeredith


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PostPosted: Sun Apr 28, 2013 6:05 pm 
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Thanks. Getting a LOC that is secured has a better interest rate than an unsecured one for sure, banks seem to want to make sure you have at least 25 % equity in your home to extend credit that's tied to the mortgage.

Back to dealing with specifically with PC, I was once told that as long as you can handle dealing with them over the phone and the occasional need to walk into a pavilion to fax off signed paper work, they do seem to offer competitive rates. The "no-fee" status that they opened with way back when no longer exists as they have just as many fees as the next bank. Though the fee for the secured LOC is only 150 compared to around 300 at CIBC so reported my sis-in-law who had the same brainwave I had and went to check it out. Again, the big difference is dealing in person or over the phone.


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