TD Bank Mortgage Rates | Expert Tips to Choose the Best Option for You

August 3, 2021 | Editorial Team

TD Canada Trust is one of the most well-known banks in Canada as it is one of the Big Five banks. TD Canada Trust, along with Bank of Montreal, Canadian Imperial Bank of Commerce, Royal Bank of Canada, and Scotiabank, make up the Big Five banks. TD Canada Trust alone has 10 million customers in Canada, are you one of them? If you are, you may have a chequing account or savings account with TD already, but do you have a mortgage?

Many Canadians tend to go with the bank they are already with when they are looking at mortgage rates for their home. Thankfully, TD Canada Trust offers a competitive interest rate (see also The TrueNorth and CIBC mortgage rates) for all of its mortgage products. We also reviewed the mortgage deals in Ottawa and Calgary! Now, let’s take a look at the mortgage products available from TD Bank to see which is the best for you!

What Mortgage Rates Does TD Bank Offer?

Here are the current posted mortgage rates TD Canada Trust is offering on their website.

TD Fixed rates (closed)

  • 1-year fixed – 3.14%
  • 2-year fixed – 3.19%
  • 3-year fixed – 3.49%
  • 4-year fixed – 3.74%
  • 5-year fixed – 4.59%
  • 6-year fixed – 5.24%
  • 7-year fixed – 5.35%
  • 10-year fixed – 5.60%

6-month convertible mortgage rate

  • 3.09%

1-year fixed open mortgage

  • 4.50%

5-year variable rate closed mortgage

  • 1.97%

5-year variable rate open mortgage

  • 3.60%

TD Canada Trust does offer lower rates than these, especially in regards to the 5-year variable rates. Head to the TD Canada Trust website to see the special offers available. Or, talk to a TD mortgage loan officer directly to see if they can offer you a lower mortgage rate.

A mortgage loan officer at TD will be able to help you figure out which of these mortgage types would be the best for you. You may benefit from a 1-year mortgage while someone else may benefit from 10-years. You can also use the mortgage calculator TD offers, or the one has as well. These will help you determine which mortgage rate fits your home, budget and financial situation.

5-year Fixed Rates: What You Need to Know

What are 5-year Fixed Mortage Rates?

A fixed mortgage rate is when the mortgage rate you agree to at the beginning is the same throughout your term. So, a 5-year fixed mortgage rate means your interest rate will be the same for five years. Mortgages with fixed rates range from 1 year, usually to a maximum of 10 years. Once the amount of years you agreed to is up, in this case, five years, you will need to renew your mortgage terms. If market mortgage rates have gone up, yours likely will as well.

With a 5-year fixed-rate mortgage, you can renew with your current lender at the end, or you can find a new lender. As your term has ended, there will be no penalties to pay.

The main benefit of a 5-year fixed-rate mortgage can also be its downfall. During the five years, if posted mortgage rates go up, you will not have to pay more. You will only have to pay the rate you agreed to in the beginning. This can also be a downfall because if posted mortgage rates go down, you will not benefit from a discount.

So, the main benefit of a 5-year fixed-rate mortgage is the stability it provides. For five years, you will be able to plan and budget accordingly.

How Much Can I Save Comparing 5-year Fixed Rates?

As TD Bank offers a wide range of mortgage types, there are plenty of chances to save. TD has a 5-year fixed closed rate of 2.14%. Currently, the 5-year variable closed rate from TD is 1.97%. This means, as of now, you would not be saving money if you chose the 5-year fixed closed rate. As the 5-year variable rate can go up with time, however, you may end up saving more in the long run with the 5-year fixed closed rate.

If you know you want to stick with a # year fixed closed rate rather than a variable rate, five years is your best option. The TD 5-year fixed closed rate is only 2.14% compared to the 10-year fixed closed rate of 5.60%. So in this scenario, you will be saving 3.46% with a 5-year fixed closed rate mortgage from TD.

Why are Fixed Rates Different to Variable Rates?

If you have ever taken out any type of loan, you have likely been able to choose between fixed rates and variable rates. Each interest rate has its benefits and downfalls.

When talking about mortgage rates, fixed rates are an agreed-upon rate for a fixed amount of time. For example, if you have a 5-year fixed-rate mortgage and agree to pay 4.40%, that will be your mortgage rate for the whole five years. It will not go up or down even if market mortgage rates do.

A variable-rate mortgage, however, will fluctuate. Whatever rate you have at the beginning of your mortgage may not be the same one you have at the end. It will either go up or down based on the market mortgage rates at the time.

You can find mortgages with both variable rates and fixed rates at any bank, including TD. Whichever type you choose between the two of them is completely up to you.

Are 5-year Mortgages Better Than Other Mortgage Terms?

A 5-year variable rate and 5-year fixed rates tend to be the most popular choice of mortgage rates. This is because five years is a good middle-ground between a short term and long term mortgage. It is enough time for homeowners to create a budget and financial plan. But, it is not long enough that homeowners will feel stuck to one mortgage or one bank if they don’t end up liking the terms or service.

TD Bank offers three different types of mortgage rates with a five-year period. This means you can choose any type of mortgage you want for the five years. Once the five years are up, you can decide if you want to stay with TD Canada or you want to find a new lender.

Best Mortgage Rates: Tips

Be Aware of High Penalties

As there are many mortgage lenders other than TD in Canada, there are some things you should consider before choosing a lender or a mortgage broker. The first is the penalties the lender charges. Many mortgages will have pre-payment penalties. This means if you pay off your mortgage before the term is up, you will have to pay a fee.

Each bank, including TD, tends to have a pre-payment calculator on their website. This will show you how much you will have to pay in penalties if you need to break your mortgage. If the number is too high, it’s best not to go with that lender. You never know what your financial situation could be like in the future. So, it’s best not to be stuck with a lender that charges extortionate penalties.

Be Mindful of Refinance Restrictions

As we discussed earlier, you never know what your financial situation could be like in the future. You may find yourself needing to refinance your mortgage to shorten your term or get a lower interest rate. If your lender has strict refinance restrictions, however, this may not be possible. One of the main refinance restrictions is a high pre-payment penalty, which we just discussed.

Another refinance restriction is that you need to have a good credit score with little to no debt. If you don’t, you may not get approved for refinancing even if it is with the same lender, such as TD Canada Trust.

You will likely also need at least 5% to 10% of equating in your home before you can refinance your mortgage. Lastly, there will likely be a fee you need to pay to your bank to refinance your mortgage.

Be mindful of these restrictions beforehand and stay away from lenders who have so many restrictions that refinancing would be impossible.

Is Mortgage Blending Allowed?

Before agreeing to a lender’s mortgage terms, you should find out if mortgage blending is allowed. Mortgage blending is when you combine an existing mortgage rate with a new mortgage rate. The point of mortgage blending is to create a new mortgage with a lower rate. With mortgage blending, you can avoid paying pre-payment penalties as you will still be keeping your original mortgage.

Mortgage blending is typically used for homeowners to obtain a lower interest rate without paying pre-payment penalties. It can also be used to access the equity in your home.

Are There Collateral Charges?

Lastly, you should check if your lender has collateral charges. A mortgage with collateral charges allows the homeowner to borrow more against their mortgage without refinancing. Collateral charge mortgages can be beneficial to those looking to borrow more money during their term. You won’t need to go through the hassle of refinancing this way.

If you don’t see yourself needing to borrow more money, a mortgage with collateral charges can be restrictive. You need to stay with the same lender throughout the term, for example, even if you find a lender with a lower interest rate. Most lenders will give you the option of including collateral charges in your mortgage rate or not, so the decision is up to you. TD Canada Trust, however, only offers mortgage rates with collateral charges. In addition, check out what type of mortgage fits you best if you’re self-employed.

Frequently Asked Questions

Is there a TD mortgage calculator?

Yes, TD has a wide range of mortgage calculators, including the following:

  • TD mortgage payment calculator
  • TD mortgage affordability calculator
  • Which TD mortgage works for me?
  • Flexible mortgage payment features calculator
  • Mortgage pre-payment calculator
  • Down payment calculator

How long do I have to act if I can no longer make my mortgage payment?

You have 30 days to act before your credit will be affected, but you should contact TD as on as you realize you can’t make your mortgage payment anymore. You will be at risk of foreclosure if you continue to be past due on your payment.

What do I need to provide when applying for a mortgage with TD?

You need to provide information that outlines your debt, income, and assets. TD will also check your credit history. You will also need a signed purchase and sale agreement for your home to start the application with TD.

What information do I need for the TD mortgage application?

You will need to input the following information:

  • Mortgage amount
  • Purchase price of the home
  • Why you need the mortgage (i.e. to purchase a home or to refinance it)
  • Property type
  • The builder if you have one
  • Dwelling style
  • Address of the home
  • The estimated value of the home
  • Annual property taxes
  • Annual heating

How long does a mortgage with TD take to close?

Closing a mortgage takes a few steps, including the application process, home inspection, appraisal and underwriting. So, your mortgage should be ready to close with TD in 30 to 40 days.

What types of mortgages does TD offer?

TD offers the following types of mortgages

  • # year fixed-rate mortgage
  • # year variable mortgage
  • Medical professional mortgage
  • Construction mortgage
  • Affordable home loan
  • Jumbo loan
  • Government loan

How can I apply for a mortgage with TD?

You can start the application online to get pre-approved for your mortgage. You can also talk to a mortgage loan officer on the phone or in-person at a TD branch.

What down payment is necessary for a mortgage with TD Canada?

The necessary down payment depends on the type of mortgage you get with TD Canada Trust. A down payment with TD can range from as low as 3% to 25%.

Does TD offer agricultural mortgage rates?

Yes, TD has two different types of agricultural mortgages: the farm mortgage and the rural property mortgage.

The Bottom Line

If you are looking for an affordable interest rate for your mortgage, TD Bank is one of the best options. With mortgages available at the low rate of 1.97%, there is good reason to consider TD Bank. Not only does TD Bank offer a low and competitive rate of interest, the bank has a great variety of mortgage products. You can choose from fixed rates, variable rates, open or closed mortgages, and more with TD Bank.

TD Bank also offers great customer service. Talking to a mortgage loan officer is completely free, and they can even help you get pre-approved for a mortgage. Similarly, you can start your application process online for free on the TD website. Applying for a mortgage has never been so convenient. If you are already a TD customer, you can keep all your finances in one place by getting a mortgage with TD.

If you don’t already bank with TD, what are you waiting for? Join the 10 million other Canadians who happily bank with TD and start your mortgage application today. You can schedule a free appointment on the TD website or call them for more information. Head over there now to get a head start in your home buying journey!