Here in Ontario, thirty five year amortizations from RMG Mortgages and B2B Bank have been a terrific offering the past few years. This mortgage product is perfect for people buying or refinancing for whom the absolute lowest payment is desired, or indeed necessary. They are only available through mortgage brokers, and not your bank.
Sometimes the extended amortization period makes the difference between being approved or not for a new mortgage.
Both RMG and B2B charge a modest interest rate premium for their 35 year mortgages. RMG charges 10 basis points (an extra 0.1 %) and B2B charges 25 basis points (an extra 0.25%)
With the government’s pending mortgage rule changes, both lenders made important announcements yesterday.
At B2B Bank, it’s business as usual, but as they pointed out to mortgage brokers yesterday….
Once internal decisions are made with respect to any policy changes or cut off dates for insured deals, we will let you know.
This could come today, tomorrow or sometime next week so if you have any deals that fit our program guidelines get them in right away!
Last night RMG Mortgages announced the end of their 35 year offering:
So my advice to you is if you are thinking of refinancing your home or even buying a home with a closing date prior to November 15, 2016 AND if you want a 35 year amortization period you should ACT NOW.
Lenders are sending out new announcements daily to the mortgage broker community – you should not assume they will wait till the very last minute to implement changes to their lending guidelines.
Samuel called me yesterday looking to refinance his home and extract $200,000 in equity to finance a no holds barred renovation makeover of his home in Coquitlam, B.C. He thinks his home is now worth $750,000 and he has a mortgage balance owing today of $400,000.
His wife is not in the workforce at the moment, so keeping the monthly payment as low as possible is essential to Samuel. I see RMG Mortgages 35 year am as the solution to his circumstances.
I explained the importance of submitting his application as soon as he possibly can, while favorable lending conditions exist for refinances and 35 year ams.
We quoted him a monthly payment of only $2,122. When you think about it, that’s an awfully low amount to be able to borrow an amount of $600,000!
Jennifer bought a good sized condo for $295,000. The closing date was September 29, 2016. She has a 20% down payment and she wants to keep the mortgage payment as low as possible as her condo fees are on the high side at $601 per month.
We arranged a $225,000 mortgage with a monthly payment of only $820!
Adam’s mortgage is coming up for renewal November 11, 2016. Currently he pays $1,071 bi-weekly and owes $424,000.
Adam has plans to do significant home renovations. He wants to increase his mortgage amount to $520,000 and at the same time keep his monthly payment as low as possible.
Just in time he qualifies for a 35 year mortgage with RMG Mortgages. He will take out $96,000 in equity and REDUCE his bi weekly payment to $861.
Simon and his wife Izzie came across a too good to be true private purchase opportunity last month. A large fully detached home in Durham region in a highly desirable area for only $800,000.
They could muster up 20% down payment, but they were having a hard time qualifying for a mortgage because their income was not high enough to satisfy lender debt service ratios.
They were delighted to learn there was a solution to their dilemma – a 35 year am mortgage with RMG Mortgages for $640,000 and a monthly payment of only $2.246.40. They took possession of their dream home September 30.
Jeremy lives in Dartmouth, Nova Scotia and during the summer he approached me about taking some equity out of his condo and reducing his monthly payment to the absolute lowest level possible.
His mortgage balance at the time was just under $182,000 and he was paying $920 each month. We increased his mortgage to $212,000 – now he has a big chunk of money to put towards a new investment condo.
We stretched the amortization period to 35 years with RMG Mortgages and his new monthly payment HAS GONE DOWN to $772 per month.
These examples all demonstrate how effective the 35 year am can be. In each case, the benefit to the borrower was substantial. If you or anyone you know think you would like to explore this option, you should reach out to your preferred mortgage broker ASAP.
Related article: 35 year mortgage might be better than lowest rate ever
Related article: 35 year am may reduce mortgage payment by ten percent
Related article: New mortgage rules mark the end of an era
Saving money has to be treated like a regular monthly expense – no less important than your rent, mortgage or car payment. The “Richest Man in Babylon” argued for 10% of your income – think bigger!