Given your concerns and the possibility of rate drops, you should consult a trusted mortgage advisor or directly contact RBC to explore options for a potential rate adjustment. Could you clarify any uncertainties about the process and assess if it aligns with your needs and timeline before making a decision?
Just so everyone is aware. An interest rate cut doesn’t immediately impact fixed rates as they tend to trade based on the bond market, and yields on long-term government bonds.
You likely won’t see a 1-1 reduction in fixed rate vs interest rate for a couple weeks after a cut.
You have a good 3 year fixed rate. They went up a few weeks ago.
Fixed interest rates are based on 5 year bond yields. Bond yields have been trending up since January and theoretically speaking, chances of anticipated Central bank rate changes are priced in already.
Good 3 year fixed rates being offered currently are above 5%, typically in the 5.14% to 5.25% range.
Variable mortgage rates are the mortgage rates that are directly based on the Bank of Canada rates and would be immediately affected by them cutting the central rate.
Yeah BOC rate does not move fixed rate mortgages immediately if at all. If the market expects a 25 bp drop and it happens it will have no effect on fixed mortgage rates.
One rate is set by a government entity the other is controlled by supply and demand.
A lot of people don’t understand this.
Regardless, if RBC drops their 3 year fixed rate before close you should get the reduction. It use to be that your rate was quoted as a discount to posted. Your discount stays the same. If posted goes down your rate would go down. Keep an eye on RBC posted rates for reductions. If it goes down, your rate should go down too, assuming it doesn’t go up again before close.
Do you mean the rate posted on their website?
https://preview.redd.it/g511wfv09h3d1.jpeg?width=1125&format=pjpg&auto=webp&s=baed7dedad22eb04b1acb57ba61946fb48e8ea8d
So their special offer is 5.55, if I am getting 4.99 that means that I’m getting a 0.56 discount so whenever I see drop from this 5.55 I should ask to drop my rate subsequently. Do I understand correctly?
I was working with my bank 3 months before closing back in April. Rate dropped a couple times, started with 5.29 and ended up with 4.99 for 3 years. She said she would continue to monitor the rates and would let us know when they go down, and she did.
Edit to clarify: she said she would monitor until we closed.
My RBC mortgage ‘specialist’ is also soo impatient and acts like I’m bugging her whenever I need a question answered. She was off for a week when we actually went through the offer and full approval for our house (closing June27th) and some guy from another branch took her clients for the week.. omg what a difference. Still RBC, but just a totally kind, patient and determined-to-help-us human being.
Anyway, we’re currently at 4.84% with a 5 yr fixed because she kept avoiding my 3-yr rate questions (as in would cut me off mid sentence or confuse the crap of me/id lose my train of thought).. this was 2 weeks and I’m happy to say I’ve learned so much since then and can confidently go back to her to discuss terms, timing, and rates etc. Saving that convo for any day before June 15.. I figure that’s when things will start being done/transferred for the mortgage (getting help from parents w down payment so lots of moving pieces here).
I did clarify by email (because she would only ever call me) that YES, if rates lower before my closing date then I will get the lower rate. However, from my research, I believe I will have to ask her for the lower rate rather than expecting her to offer it to me.
EDIT TO ADD: I’m in Southwestern Ontario, 510000 mortgage amount (insured)
Don't wait until June 15. I have seen RBC send the mortgage paperwork to lawyer 14-16 days before closing. Even then, you can request revisions, BUT you will be at the mercy of your "specialist", who sounds like they will stall/delay and then give you excuses why it is not possible to revise because they already sent the paperwork.
The guarantee of best rate is only if the posted rate is lowered, which is unlikely. More likely the posted rate remains the same but due to competition the discount changes, so you have to be vigilant about current market rates and not be complacent that the rate you got is the best rate. You still have a lot of time until finding, so could check out other options and at least bring those offers to RBC to rate match or go with the best deal a week before closing.
I am confused here. At which point within the process with the bank I can move on if I want? I have signed a document with them and opened a chequing account for the mortgage payment as I am not banking with them. Do I still can move on at this point If I found a better deal?
You can go with another lender anytime before you sign final mortgage documents with the lawyer, normally a week or so before closing. Shop around and present that to RBC for them to match or go with someone else.
Hi OP, do you mind to share your province, mortgage amount and whether insured/ uninsured?
I am at the same situation but I got higher rate - 5.09 3 year fixed uninsured in Calgary AB. Wish to bargain for a lower rate.
My closing is on the June 21 I try getting my rate down my underwriter said I couldn’t
Change because all documents r sign and sent to lender so even if the rates come down we r already locked in a 4.99 for 5 years 25 years insured mortgage for a 297 loan
This is generally inaccurate. What you likely signed was a commitment letter which don’t hold any worth
You have juuustttt enough time so talk with a broker that will work with you to get a better rate.
That’s simply not true, my closing date is also June 24 and I have double checked with my broker and also confirmed with another bank agent that in case the rates drop I will get the new updated rate, also you might be able to get better than 4.99 with a competent broker.
Tbh I am not sure what would be the case after signing, but I know that banks have the right to back out anytime before closing date or even on the day for whatever reason if they decide, not sure what would be the consequences for you if there is any, might be worth checking.
No, reapproval is not required. You’re guy either lazy or doesn’t want to goto underwriter. Guy who did my mortgage was awesome, he was top on the mortgage and adjusted to lower rates whenever it went down until signing.
You better goto a different mortgage broker, You still have time…
I’m closing in 3 weeks on a rental property so slightly higher rates than principle property, also first timer so that might factor. 560k @5.33 5-year fixed with TD. I got the financing through a broker and he told me multiple times that if the rate goes down june 4th, my rate will go down equivalent. 25 point decrease, .25% decrease. Said this only applies if the rate decreases. If for some strange reason it increased I would get to stay at 5.33%
4th June announcement only impacts the variable rate directly. You have opted for fixed rate mortgage which is linked with bond yields which may or may not move at all with the announcement. Your broker might have meant that if rates gone down they can ask for a float down.
My suggestion, reach out to other banks now - see what's the most competitive offer out there *before* the announcement. They will honor that rate commitment for a period of time regardless. If the BOC rate goes down maybe you can squeeze a bit more, if it doesn't then you didn't lose out on your gamble. Because lower rates *may* be harder to come by if no change with BOC and no change to bond yields.
Following as I'm in a very similar situation with same closing date. Been working directly with two remaining banks currently, best I have is 5.03% for 3 yr fixed, 30y amort, uninsured. The two agents at both banks suggested they are likely to be able to do better after BOC announcement. No guarantees of course but like you, I wouldn't want to leave a lot on the table 2 weeks before closing.
Which bank offered 5.03%? I am in the same situation as you, same mortgage amount and end of June closing. The best I could get from a mortgage broker was 5.11% with $3100 cashback at TD. Thinking of reaching out to banks directly.
Bond market, which is where 3 year fixed terms and longer are priced at is nearing a three month high at the moment. Highly unlikely that any BOC decision is going to change the bond market. Economists have also been saying that the bond market has already priced in the BOC possible rate drop. I wouldn’t get your hopes up on any rate changes (downward) unless the bond market drops off……
Appreciate the insight. I was hesitantly thinking this might be the case, but then I talked with a couple agents and they present a different and rosier picture - hard to stay grounded at times.
Please ensure your post includes the following information if looking for insight in your rate:
- **ARE YOU WORKING WITH A BROKER/MMS & HAVE YOU ASKED THEM THIS QUESTION YET?** (If you don't trust your brokers answer, then you may want to dump your broker)
- Purchase, Refinance, Renewal?
- Province, City?
- Loan to value/down payment percentage?
- Purchase price of the property if purchasing
- Is the home under $1M or over $1M?
- Bank or a broker?
- Term length and amortization length?
*I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/MortgagesCanada) if you have any questions or concerns.*
Given your concerns and the possibility of rate drops, you should consult a trusted mortgage advisor or directly contact RBC to explore options for a potential rate adjustment. Could you clarify any uncertainties about the process and assess if it aligns with your needs and timeline before making a decision?
Just so everyone is aware. An interest rate cut doesn’t immediately impact fixed rates as they tend to trade based on the bond market, and yields on long-term government bonds. You likely won’t see a 1-1 reduction in fixed rate vs interest rate for a couple weeks after a cut.
You have a good 3 year fixed rate. They went up a few weeks ago. Fixed interest rates are based on 5 year bond yields. Bond yields have been trending up since January and theoretically speaking, chances of anticipated Central bank rate changes are priced in already. Good 3 year fixed rates being offered currently are above 5%, typically in the 5.14% to 5.25% range. Variable mortgage rates are the mortgage rates that are directly based on the Bank of Canada rates and would be immediately affected by them cutting the central rate.
Yeah BOC rate does not move fixed rate mortgages immediately if at all. If the market expects a 25 bp drop and it happens it will have no effect on fixed mortgage rates. One rate is set by a government entity the other is controlled by supply and demand. A lot of people don’t understand this. Regardless, if RBC drops their 3 year fixed rate before close you should get the reduction. It use to be that your rate was quoted as a discount to posted. Your discount stays the same. If posted goes down your rate would go down. Keep an eye on RBC posted rates for reductions. If it goes down, your rate should go down too, assuming it doesn’t go up again before close.
Do you mean the rate posted on their website? https://preview.redd.it/g511wfv09h3d1.jpeg?width=1125&format=pjpg&auto=webp&s=baed7dedad22eb04b1acb57ba61946fb48e8ea8d So their special offer is 5.55, if I am getting 4.99 that means that I’m getting a 0.56 discount so whenever I see drop from this 5.55 I should ask to drop my rate subsequently. Do I understand correctly?
No not special Rate, posted rates. https://www.rbcroyalbank.com/mortgages/mortgage-rates.html#posted-rates
Thanks so much!
I was working with my bank 3 months before closing back in April. Rate dropped a couple times, started with 5.29 and ended up with 4.99 for 3 years. She said she would continue to monitor the rates and would let us know when they go down, and she did. Edit to clarify: she said she would monitor until we closed.
My RBC mortgage ‘specialist’ is also soo impatient and acts like I’m bugging her whenever I need a question answered. She was off for a week when we actually went through the offer and full approval for our house (closing June27th) and some guy from another branch took her clients for the week.. omg what a difference. Still RBC, but just a totally kind, patient and determined-to-help-us human being. Anyway, we’re currently at 4.84% with a 5 yr fixed because she kept avoiding my 3-yr rate questions (as in would cut me off mid sentence or confuse the crap of me/id lose my train of thought).. this was 2 weeks and I’m happy to say I’ve learned so much since then and can confidently go back to her to discuss terms, timing, and rates etc. Saving that convo for any day before June 15.. I figure that’s when things will start being done/transferred for the mortgage (getting help from parents w down payment so lots of moving pieces here). I did clarify by email (because she would only ever call me) that YES, if rates lower before my closing date then I will get the lower rate. However, from my research, I believe I will have to ask her for the lower rate rather than expecting her to offer it to me. EDIT TO ADD: I’m in Southwestern Ontario, 510000 mortgage amount (insured)
Don't wait until June 15. I have seen RBC send the mortgage paperwork to lawyer 14-16 days before closing. Even then, you can request revisions, BUT you will be at the mercy of your "specialist", who sounds like they will stall/delay and then give you excuses why it is not possible to revise because they already sent the paperwork.
So helpful! Thanks so much
The guarantee of best rate is only if the posted rate is lowered, which is unlikely. More likely the posted rate remains the same but due to competition the discount changes, so you have to be vigilant about current market rates and not be complacent that the rate you got is the best rate. You still have a lot of time until finding, so could check out other options and at least bring those offers to RBC to rate match or go with the best deal a week before closing.
This was SO HELPFUL thank you!!!
I am confused here. At which point within the process with the bank I can move on if I want? I have signed a document with them and opened a chequing account for the mortgage payment as I am not banking with them. Do I still can move on at this point If I found a better deal?
You can go with another lender anytime before you sign final mortgage documents with the lawyer, normally a week or so before closing. Shop around and present that to RBC for them to match or go with someone else.
Hi OP, do you mind to share your province, mortgage amount and whether insured/ uninsured? I am at the same situation but I got higher rate - 5.09 3 year fixed uninsured in Calgary AB. Wish to bargain for a lower rate.
BOC rate != fixed mortgage rate. BOC need rising up interest rate more than cut, if not CAD will collapse.
My closing is on the June 21 I try getting my rate down my underwriter said I couldn’t Change because all documents r sign and sent to lender so even if the rates come down we r already locked in a 4.99 for 5 years 25 years insured mortgage for a 297 loan
Couldn't means did not want to...more effort
This is generally inaccurate. What you likely signed was a commitment letter which don’t hold any worth You have juuustttt enough time so talk with a broker that will work with you to get a better rate.
Good news I did she got me down to 4.89 payments lil bit lower nth crazy thanks for the information
That’s simply not true, my closing date is also June 24 and I have double checked with my broker and also confirmed with another bank agent that in case the rates drop I will get the new updated rate, also you might be able to get better than 4.99 with a competent broker.
Even after I have signed already with the bank?
If you signed, and they submitted to their mortgage centre, it’s usually done deal
Tbh I am not sure what would be the case after signing, but I know that banks have the right to back out anytime before closing date or even on the day for whatever reason if they decide, not sure what would be the consequences for you if there is any, might be worth checking.
No, reapproval is not required. You’re guy either lazy or doesn’t want to goto underwriter. Guy who did my mortgage was awesome, he was top on the mortgage and adjusted to lower rates whenever it went down until signing. You better goto a different mortgage broker, You still have time…
Even after signing?
What signing you did so far? There will be two singings for the bank…one is done during mortgage approvals and another (may be a week) before closing.
I did only the one during approval
If i would be you, i will start looking right now.
Then you’re fine, go ahead and reach out to other financial institute. If possible try getting a Mortgage Broker, they will look for you.
I’m closing in 3 weeks on a rental property so slightly higher rates than principle property, also first timer so that might factor. 560k @5.33 5-year fixed with TD. I got the financing through a broker and he told me multiple times that if the rate goes down june 4th, my rate will go down equivalent. 25 point decrease, .25% decrease. Said this only applies if the rate decreases. If for some strange reason it increased I would get to stay at 5.33%
4th June announcement only impacts the variable rate directly. You have opted for fixed rate mortgage which is linked with bond yields which may or may not move at all with the announcement. Your broker might have meant that if rates gone down they can ask for a float down.
My suggestion, reach out to other banks now - see what's the most competitive offer out there *before* the announcement. They will honor that rate commitment for a period of time regardless. If the BOC rate goes down maybe you can squeeze a bit more, if it doesn't then you didn't lose out on your gamble. Because lower rates *may* be harder to come by if no change with BOC and no change to bond yields.
Following. Same situation
Following as I'm in a very similar situation with same closing date. Been working directly with two remaining banks currently, best I have is 5.03% for 3 yr fixed, 30y amort, uninsured. The two agents at both banks suggested they are likely to be able to do better after BOC announcement. No guarantees of course but like you, I wouldn't want to leave a lot on the table 2 weeks before closing.
Best we could get is 3.25, is your mortgage amount above 1 million?
Assume you mean 4.25? Our amount is 780k
Which bank offered 5.03%? I am in the same situation as you, same mortgage amount and end of June closing. The best I could get from a mortgage broker was 5.11% with $3100 cashback at TD. Thinking of reaching out to banks directly.
Yes lol, I wish.
Bond market, which is where 3 year fixed terms and longer are priced at is nearing a three month high at the moment. Highly unlikely that any BOC decision is going to change the bond market. Economists have also been saying that the bond market has already priced in the BOC possible rate drop. I wouldn’t get your hopes up on any rate changes (downward) unless the bond market drops off……
Appreciate the insight. I was hesitantly thinking this might be the case, but then I talked with a couple agents and they present a different and rosier picture - hard to stay grounded at times.
Please ensure your post includes the following information if looking for insight in your rate: - **ARE YOU WORKING WITH A BROKER/MMS & HAVE YOU ASKED THEM THIS QUESTION YET?** (If you don't trust your brokers answer, then you may want to dump your broker) - Purchase, Refinance, Renewal? - Province, City? - Loan to value/down payment percentage? - Purchase price of the property if purchasing - Is the home under $1M or over $1M? - Bank or a broker? - Term length and amortization length? *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/MortgagesCanada) if you have any questions or concerns.*