I wrote about my mortgage renewal strategy earlier this year. Since we don’t plan on moving in the next five years, my top consideration is to get the best interest rate possible. That meant looking at the best of either a 5-year close variable rate mortgage or a 1-to-2-year fixed rate mortgage. With my mortgage up for renewal at the end of the month it was time to put my strategy to the test.

I do my own research on RateSpy.com to find out what offers other lenders have in the market. I also received a renewal letter from TD offering 2.95 percent on a 5-year closed variable and 3.04 percent on a 1-year fixed rate. With that offer in hand, plus a screenshot of RateSpy’s best 5-year variable rates, I met with TD to negotiate my mortgage renewal.

Renewed My Mortgage

The advisor was unaware of the renewal letter I received with the 2.95 percent rate. To my surprise she said the best TD could offer was 3.05 percent. I explained the letter and how I was disappointed the bank couldn’t do more to keep my business. Pulling out the RateSpy information I asked if TD could meet me somewhere in the 2.64 percent range or else I’d be taking my business to HSBC.

She got up to speak with her manager and when she came back she said she’d have to send in a request to head office for approval. At this point I’m thinking there’s no way TD’s going to budge and I’m going to have to act on my threat to move my mortgage elsewhere.

Later that afternoon the advisor calls me at the end of her day with good news. They could bring the rate down to 2.70 percent, keeping all of my pre-payment and double-up options intact. I agreed and signed the paperwork the next day.

Did I get the absolute best deal on the market? No. But I got 25 basis points off TD’s best published offer, and I get to keep all of my banking in one place, which, frankly, is convenient and comforting to me.

Truthfully I was prepared to leave if the bank couldn’t come close to my desired rate. That played a big factor in the negotiation. Be willing to walk away. I did, and they called back hours later with an offer good enough for me to sign.

The plan is for this to be the second last time I negotiate a mortgage. The five-year term will take us to 2023. We anticipate having the house paid off completely by the end of 2024. That means renewing for a 1-year open rate that gives us the flexibility to pay off the remaining balance.

Promo of the Week:

Wealthsimple announced it is getting into the discount brokerage business with the launch of a new “zero-commission” trading platform. Wealthsimple Trade is a mobile app that will give investors unlimited zero-commission trades of more than 8,000 stocks and ETFs.

The platform is currently in beta testing and interested users can join the waiting list here. A wider, public launch is expected to roll out later this year. At launch the platform will only support non-registered accounts but the company says it hopes to support more types of accounts in the future.

This Week’s Recap:

This week I wrote about the stock market crash that never came. Some interesting comments on this one. Thanks for sharing!

Weekend Reading:

Here’s more on the latest investing trend where Wealthsimple and Fidelity (south of the border) are shaking-up the investing world by offering trading and managed funds at no cost.

Dan Bortolotti argues that while zero-fee investing is on the rise, it won’t make you a successful investor:

“I just hope investors will maintain a healthy skepticism and recognize that what stands in the way of investing success today is not just fees, but our own behaviour.”

Here’s Dan again with a look at Vanguard’s all-in-one asset allocation ETFs versus a multi-ETF portfolio. He says, “embrace the simplicity.”

PWL Capital’s Ben Felix explains why optimal asset location, the practice of holding certain asset classes, like bonds, in certain account types, like RRSPs, is probably not worth the effort:

A Wealth of Common Sense blogger Ben Carlson dives into the half-life of knowledge – the idea that everything we know has an expiration date.

Why does Ben Carlson think Jerry Seinfeld might be our greatest living philosopher? Read about it in the art of self-control.

Why retirement success means focusing on the paycheque, not a savings number.

Jason Heath answers a reader question about whether it’s worthwhile to make an RRSP contribution at age 70.

Of Dollars and Data blogger Nick Maggiulli looks at the democratization of information:

“Today you are drinking from the firehose of 1s and 0s and it is too difficult to find an informational edge because everyone else and their algorithms are also drinking from that same firehose.”

Why you need a plan when withdrawing from an RESP to pay for school.

Why you should answer yes to these six questions first before investing in real estate.

Finally, infamous short-seller Marc Cohodes has been accused by the Alberta Securities Commission of trying to manipulate the stock price of Calgary-based excavator Badger Daylighting Inc.

Have a great weekend, everyone!

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13 Comments

  1. Frito on August 18, 2018 at 1:38 pm

    Congrats on the good rate. Is it possible you got it because they knew you’d be blogging about it?

    • Robb Engen on August 18, 2018 at 2:13 pm

      Hi Frito, I very much doubt that. The bank couldn’t even coordinate the mortgage renewal letter they sent in the mail with the actual advisor who quoted me a different rate. I doubt they’d have a hot clue who I am, nor would they care.

      • Justin on August 19, 2018 at 9:22 am

        I love how they were not only unaware of the letter they sent you, but couldn’t even match their own rate…

  2. Cheryl on August 18, 2018 at 2:44 pm

    Way to go on getting a good rate and being ready to walk if you didn’t! The last time I renewed a mortgage for 5 years I really thought I’d be there that long too, but the divorce happened first. Sold house. Took a $10,000 penalty.

    As for TD I was a victim of a rogue employee who I’d never had any interaction with because she lives in a different province. Out of the blue she sends me a letter saying she cancelled my Visa due to my bad behavior of operating that account. I immediately called Visa who confirmed the same woman who sent me the letter had put in the request in to cancel my card. The Visa employee confirmed my account had always been in good standing and there’s never been any problems. I fired off a complaint to TD and threatened to go to the media so they could attempt to back up their lie in the court of public opinion. The next letter from TD said my Visa was reactivated the way it had been. No apology. My mortgage was at TD and I was nervous as hell that if the rogue employee got in trouble for me outing her as a liar, she could do something really bad to my mortgage and maybe my credit rating. I was really scared. For my own peace of mind I took my mortgage elsewhere and closed down my savings and chequeing account, or whatever I had at the time. I just couldn’t take the risk of further retaliation from that rogue employee after I reported her. Ironically I still have the Visa and use it from time to time, I’ve had it since 1990, the above rogue employee incident took place in 2003. The only reason I don’t cancel that Visa is because I hear it can affect my credit rating.

    • Dividend Earner on August 18, 2018 at 6:54 pm

      @Cheryl
      Cancelling a credit card doesn’t have a negative impact on your credit. Not having a credit card is another story. I have few credit cards for a number of reasons and I change them if it means aligning with a bank or a reward strategy.

      The amount of credit based on your income is something that matters but overall, there are many other factors that can help with your credit or hurt but I don’t believe cancelling a card is one.

    • Robb Engen on August 19, 2018 at 8:34 am

      Hi Cheryl, that story is crazy! I’m sorry that happened to you.

      I agree with Dividend Earner that it shouldn’t matter much to your score if you cancel that card now. I’m sure you’ve established other credit history and built good habits of paying your bills on time and not abusing credit. That’s what matters.

      • Cheryl on August 19, 2018 at 9:44 am

        I’ve never had a bad credit history. My view on using credit cards is for emergencies or when traveling to conserve my cash. I keep the TD Visa in my wallet because I know the PIN and it has the lowest credit limit. It’s also the card my vet has on hand to bill me for farm visits for the horses, though a phone call could switch that one out. I have 2 other credit cards with much higher limits, that I don’t know the PINs on, and use from time to time for online purchases and pay off when the bill comes in. The MC issued by a credit union I used to work for recently switched vendors and when the new card arrived I did change the PIN. I’m thinking of putting the MC into my wallet and using it on a trip next month instead of the TD Visa. About twice a year Tangerine bugs me with a pre-approved credit card with $10,000 limit. I’m almost thinking of accepting it the next time I get that offer and ditching the TD Visa.

        I understand what Dividend Earner is saying about switching credit cards if they align with an offer or rewards program. I’ve seen a lot of credit cards out there with hefty fees and I understand the reasoning if a person uses a credit card a lot. For me it doesn’t make sense to have a fee of $100/year or any fee for a rewards card if I spend less than $1000/year on the credit card.

  3. GreenDollarBills on August 19, 2018 at 3:18 am

    Congratulations on the new rate. I took a similar view 2.5 years ago when I fixed my mortgage for 5 years at a rate of 2.54% (in the UK). Since then rates haven’t moved and I must admit that I regret that I didn’t take a 1 or 2 year variable rate. Now I have the interesting option of taking a hefty £13k penalty but to re-mortgage a higher amount at a lower rate for 2 years with the ability to invest the extra cash. I’ve calculated that I’d need a return of 4% per annum to justify the costs. Thoughts?

    • Robb Engen on August 19, 2018 at 8:45 am

      @GReenDollarBills – Thanks for your comment. Without knowing anything about your financial situation it’s tough to say what approach to take. I’d personally hesitate to pay a guaranteed $13,000 penalty for the opportunity to potentially earn a higher rate of return. That’s essentially borrowing to invest, so you better make darn sure you’re comfortable with that and understand the risks (one of which is that your investments tank in the next two years).

      Backing up for a second, you’re half-way through a 5-year rate of 2.54 percent. That’s still incredibly cheap borrowing and if it were me I’d just ride that out until renewal.

  4. NZ Muse on August 19, 2018 at 4:15 am

    Ahh, your interest rates! I just refinanced but our ‘good’ rates are horrible compared to yours haha – in the 4%s.

    • Robb Engen on August 19, 2018 at 8:47 am

      @NZ Muse – Ha! I’ll admit to feeling a bit anxious about renewing at a higher rate than before (it was 2.19 percent previously) but I fully understand we’re in a period of historically low interest rates and extremely lucky to be paying less than 3 percent on our mortgage.

  5. Eve on August 19, 2018 at 9:34 am

    Current mortgage is $488k. Sitting at 3.44% 5year variable fixed which expires January , 2019. Also with TD. I can do an early renewal September. Just from a call to TD Easy line they quoted 3.12% over the phone. Assume may be better if I went into my branch.

    Wouldrecommend sticking with a variable 5year fixed? Shopping around??

    Also would you recommend merging home equity LOC into mortgage?

    Thank you

  6. GYM on August 20, 2018 at 9:50 pm

    That’s a really good rate, Robb! Good job on the negotiations. I got 2.79%- I didn’t even go there in person, but in hindsight probably should have. I didn’t bother changing mortgage providers too, it’s a lot of hassle and I agree that it is comforting to have your mortgage in one place.

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