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.
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!
