TD Bank Mortgage Rates

TD Mortgage Rates

The Toronto-Dominion Bank, commonly referred to as TD Bank, is a multinational bank in Canada that was created following the 1955 merger of The Dominion Bank and the Bank of Toronto. Today TD Bank is considered the second largest bank in Canada based on market capitalization, although by assets alone it is ranked the first. The bank serves over 11 million customers in Canada and 26 million globally. TD Bank offers an array of products including retail and commercial banking, capital markets, insurance products, and wealth management.

TD Fixed Rate Mortgages

A fixed rate mortgage involves a stable interest rate that does not fluctuate over the course of the loan’s term. 

TD Variable Rate Mortgages

A variable rate mortgage involves an interest rate that fluctuates based on a certain benchmark, usually a prime rate. Below are TD’s current posted rates:

TD Bank Mortgage Features

In addition to competitive rates, TD Bank offers several features that can help you pay off your mortgage faster and provide flexibility. Let's explore some of these features:

Increase Your Mortgage Payment

With TD Bank, you have the option to increase your mortgage payment by up to 100% once every year. This additional payment goes directly towards paying down your mortgage principal, helping you reduce your overall interest payments and become mortgage-free sooner.

Annual Mortgage Prepayment

At TD Bank, you can annually pay up to 15% of your initial mortgage balance as an extra payment on a closed mortgage.
 By taking advantage of this feature, you can further reduce your interest costs and accelerate your path to mortgage freedom.

Payment Pause

Life can sometimes throw unexpected challenges our way, and TD Bank understands that. With their payment pause feature, you have the option to skip your mortgage payment for one month each year, up to a total of four times over your full amortization period. While this can provide temporary payment relief, keep in mind that interest will continue to accrue during this period, resulting in a slightly higher overall cost of your mortgage.

TD Monthly Property Tax Payments

Rather than paying your property taxes separately, TD Bank offers the convenience of including your property tax payments in your regular mortgage payments. 

TD Mortgage Protection Insurance

TD Bank offers mortgage protection insurance, including mortgage life insurance and critical illness insurance. Mortgage life insurance provides coverage to pay off some or all of your mortgage in the event of your passing, providing financial security for your loved ones. Critical illness insurance, on the other hand, can help cover your mortgage payments if you're diagnosed with a covered critical illness.

TD Bank Prime Rate and Mortgage Prepayment

TD Home Equity FlexLine

TD Home Equity FlexLine is a home equity line of credit (HELOC). In other words, it’s a line of credit that uses positive equity in your home as security. You can borrow up to 80% of your home’s value with TD, but this amount could be lower if you presently hold a mortgage or are using 100% revolving credit. The interest rate for the TD Home Equity FlexLine is variable. The TD Prime Rate is currently set at 2.45%.

TD’s HELOC product is unique because there is an option to have a revolving and term portion. The revolving portion is the amount that you can borrow up to a credit limit that is subject to the variable interest rate. Like all lines of credit, only interest payments are due periodically and you can pay down the balance at your own pace.

The term portion of the FlexLine is optional. If you wish, you can convert part or all of the revolving portion into a term portion. The term portion is essentially a term loan because it is subject to regular payments and must be repaid by a certain date. There is the option to have a closed or open prepayment term portion.

TD Mortgage Prepayment Penalty

If your mortgage is closed, prepayment penalties will likely apply if you attempt to pay part or all of the balance early. Mortgages are a contractual obligation and if you make a payment early, you’re violating the contract which is why you could incur a prepayment penalty. Every bank’s prepayment penalty policy and fee varies.

You can calculate what your prepayment penalty will be using TD’s mortgage prepayment calculator. Even though you might incur a fee, it could still be worth the penalty which is why it’s important to understand the cost.

How to Get a TD Mortgage Pre-Approval

Getting pre-approved for a mortgage can help you stick to a budget while shopping and make the purchasing process smoother. The mortgage pre-approval process only takes 5 to 10 minutes. If you’re approved, TD will hold your mortgage offer for 120 days.

In order to prequalify for a TD mortgage, you usually need to meet the following criteria:

• Have good credit
• Have steady, reliable income, usually from full-time employment
• Be a resident of Canada with a valid Canadian address
• Be the age of majority in your province or territory

For a pre-approval meeting with a TD representative, the bank suggests you bring the following documents and information:

• Current address
• Previous addresses, if you’ve lived at your current address for less than 3 years
• Your current employer’s information, such as their address, phone number, etc.
• Previous employer’s information, if you’ve worked with your current employer for less than 3 years
• Source of verifiable income, such as pay stubs, letters of employment, etc.
• If you’re self-employed, 2 most recent Notice of Assessments from your income tax return
• Value of your assets, such as properties, cars, investments, etc.
• Recent statements related to credit, such as mortgages, loans, credit cards and lines of credit
• Housing expenses, such as property tax, condo fees, utilities, etc.
• Financial information about co-borrowers, if applicable
• Social Insurance Number (optional)

How to Get a TD Mortgage

In order to qualify for a TD mortgage, you usually need to meet the following criteria:

• Have good credit
• Have steady, reliable income, usually from full-time employment
• Be a resident of Canada with a valid Canadian address
• Be the age of majority in your province or territory

TD will likely ask for the documentation and information listed above in the pre-approval section as well when applying for a mortgage. Since TD is one of the biggest banks in Canada, getting approved can be challenging, especially if you don’t have traditionally favourable financial circumstances. Before applying, do what you can to improve your credit and financial position to better your odds of approval.

Using TD Mortgage Specialists

Some people prefer a personal connection when banking. Fortunately, TD has a team of mortgage specialists that can call you or meet in person to discuss your financial needs. If you choose to work with a TD mortgage specialist, be prepared to provide your personal and employment information during your meeting.

Pros of Banking with TD

• Competitive interest rates. Since TD is among the largest banks in Canada, they can offer some of the best rates in the market.
• Pre-approved rates. Once you get pre-approved for a mortgage with TD, the interest rate offer you receive won’t change for 120 days.
• Other services. By being a TD client, you can access other services including financial products and advice.
• TD is one of the best banks in Canada. Working alongside them will give you confidence about your financing decision.

Cons of Banking with TD

• Strict qualification criteria. If you don’t meet the ideal borrower mold, it can be challenging to qualify for a mortgage with TD. Specifically, if you have unstable income or bad or no credit.
• New to Canada. It’s unclear if TD will approve mortgages for individuals that just arrived in Canada. Unfortunately, these borrowers are often considered high risk.
• Special rates. TD offers discounted rates for some of their mortgage plans. While this is great, they are often limited time offers and subject to certain criteria.

What are the different kinds of rates?

Banks offer different kinds of rates for mortgages. All of Canada’s big banks usually offer three types of rates: inflated rates used for reference, contracts and penalties; rates they post online or advertise to customers as special or limited time offers; and rates they keep quiet about but are the best rates, normally these are negotiated.

Posted Rates

Posted rates are the rates used to determine penalty fees. As a result, these rates are inflated to get banks more money. No one should be paying posted rates on a mortgage. They are used for reference and customers can negotiate or seek out better advertised rates from there.

Special Mortgage Rates

Special mortgage rates are the rates normally offered online or in advertisements as a limited time deal. They are not limited time deals or special in any way. They are lower than posted rates and generally what mortgage specialists can outright offer clients. However, smaller lenders and credit unions generally offer more competitive rates than the big banks’ special rates. Seeking out comparable loans and their rates can put you in a position to ask for even better rates than what big banks offer you as “special”.

Discretionary Rates

Discretionary rates are the good deals big banks can offer, but won’t openly tell clients about or advertise publicly. Banks will offer these rates to preferred clients, because they don’t want to lose their business. Ultimately, banks want business and any client, preferred or not, can negotiate rates down into the discretionary category.