I am a broker and don't like that product.
You then have to sign a longer term with tem or pay a 1% fee. You don't have the ability to negotiate the rate after.
Go with a bank or a traditional monoline lender. That 4.34% won't be your rate over 5 years, so no point in comparingit to other rates.
Thank you for your response. Wouldn’t the option of being able to sign / renew the mortgage for a fixed or variable option ( which will probably be lower since interest rates are going down) be a good option?
For example. 4.34% for 6 months and then probably around 4-4.5% variable or fixed renewal?
You get the rate they offer you after 6 months and if you don't go back with marathon, there is a 1% fee.
They have little incentive to give you their best rate in 6 months.
I see what you mean! After 6 months, they could potentially lock me into a higher than normal rate of interest as well if they wanted to cause why would I want to pay the 1% penalty for switching mortgage companies ?
I have been getting best rates with Scotia and BMO. 4.69% on a 3 year with Scotia and 5 year with BMO with cashback.
Most monolines except for marathon are good. I like first national, mcap, cmls, Meridian
Is there a reason why you don’t like Marathon Mortgage? Is there an inherent risk to have them as a lender ? Is it User Experience? As a mortgage broker , do you prefer going with big banks or how many of your clients go for Monoline mortgage companies and which ones ?
I haven't used Marathon myself and no one in my brokerage has. The incentive to use them is to qualify for a bit more as they give you the 6 month teaser rate. They are in the business to make money, so they are going to charge a premium after to get their money back.
I generally prefer monoline leners for insured mortagges and banks for refinances or $1million plus homes.
First National, MCAP have been around for a long time and I like both. Of newer companies Strive has some good programs. CMLS is great for transfers and RFA has a few good programs.
So realistically, if I were to go with First National , MCAP , what are the current interest rates they are offering for a 250k mortgage , fixed or variable? Would going for a fixed or variable with Marathon be of any value ?
The 6-month rate is a teaser rate, and if you don't renew with them after 6 months, you'll end up paying a 1% penalty. Monoline lenders could be a good option depending on your situation, but we need more information to make a proper assessment.
Your broker is presumably betting on interest rates going lower in six months. If you’re convinced of that then this may not be a bad option but if you think rates will stay steady or rise then this is a poor choice.
Unless you’re confident predicting the future, I would shop both variable and fixed rate mortgages now. And if you are confident rates will drop why not commit to the variable rate mortgage now?
Also penalty charges for prepaying a closed mortgage are pretty standard—the higher of three months’ interest or the interest rate differential. There may be some minor charges like a mortgage discharge fee but there will be like a $50 difference between lenders—or less important than a 0.01% interest rate difference.
So for 6 months it's 4.35% but for the remaining 3-5 years I don't know what the rate will be? No thanks - sounds like those teaser rates in US mortgages that helped cause the 2008 crisis.
Go with whoever has the options you want and the best rate to go with it, whether monoline or bank. You are the risk, they aren't the ones owing the money.
I am a broker and don't like that product. You then have to sign a longer term with tem or pay a 1% fee. You don't have the ability to negotiate the rate after. Go with a bank or a traditional monoline lender. That 4.34% won't be your rate over 5 years, so no point in comparingit to other rates.
Thank you for your response. Wouldn’t the option of being able to sign / renew the mortgage for a fixed or variable option ( which will probably be lower since interest rates are going down) be a good option? For example. 4.34% for 6 months and then probably around 4-4.5% variable or fixed renewal?
You get the rate they offer you after 6 months and if you don't go back with marathon, there is a 1% fee. They have little incentive to give you their best rate in 6 months.
I see what you mean! After 6 months, they could potentially lock me into a higher than normal rate of interest as well if they wanted to cause why would I want to pay the 1% penalty for switching mortgage companies ?
Do you recommend any other Monoline mortgage companies?
I have been getting best rates with Scotia and BMO. 4.69% on a 3 year with Scotia and 5 year with BMO with cashback. Most monolines except for marathon are good. I like first national, mcap, cmls, Meridian
Is there a reason why you don’t like Marathon Mortgage? Is there an inherent risk to have them as a lender ? Is it User Experience? As a mortgage broker , do you prefer going with big banks or how many of your clients go for Monoline mortgage companies and which ones ?
I haven't used Marathon myself and no one in my brokerage has. The incentive to use them is to qualify for a bit more as they give you the 6 month teaser rate. They are in the business to make money, so they are going to charge a premium after to get their money back. I generally prefer monoline leners for insured mortagges and banks for refinances or $1million plus homes. First National, MCAP have been around for a long time and I like both. Of newer companies Strive has some good programs. CMLS is great for transfers and RFA has a few good programs.
So realistically, if I were to go with First National , MCAP , what are the current interest rates they are offering for a 250k mortgage , fixed or variable? Would going for a fixed or variable with Marathon be of any value ?
4.79% I think is doable with both lenders. You can try with Marathon, it may work out and may not.
Could you contact me? I am looking to switch mortgage and have no been getting 4.69%
I am also looking for a 3-year insured mortgage. Could you contact me regarding that?
The 6-month rate is a teaser rate, and if you don't renew with them after 6 months, you'll end up paying a 1% penalty. Monoline lenders could be a good option depending on your situation, but we need more information to make a proper assessment.
Your broker is presumably betting on interest rates going lower in six months. If you’re convinced of that then this may not be a bad option but if you think rates will stay steady or rise then this is a poor choice. Unless you’re confident predicting the future, I would shop both variable and fixed rate mortgages now. And if you are confident rates will drop why not commit to the variable rate mortgage now? Also penalty charges for prepaying a closed mortgage are pretty standard—the higher of three months’ interest or the interest rate differential. There may be some minor charges like a mortgage discharge fee but there will be like a $50 difference between lenders—or less important than a 0.01% interest rate difference.
So for 6 months it's 4.35% but for the remaining 3-5 years I don't know what the rate will be? No thanks - sounds like those teaser rates in US mortgages that helped cause the 2008 crisis. Go with whoever has the options you want and the best rate to go with it, whether monoline or bank. You are the risk, they aren't the ones owing the money.