- Hey, welcome back, it's Nolan Matthias from Mortgage 360.
And today we're just gonna do a quick
and dirty video on the HSBC 0.99% variable rate mortgage,
and whether or not you should consider it.
But before we get into it,
do me that favor hit the subscribe button,
hit the notification bell
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Okay, so we've done two other videos on this
in the series on the HSBC 0.99% mortgage rate.
We have talked about it in depth with respect to the truth
about the 0.99% rate and the things you need to look out
for not just getting a mortgage from HSBC
but also getting a mortgage from any big bank.
And then we also did a video
on setting the record straight about HSBC,
which I will link both of those up here.
And in that video,
we talked about the bad press that they've received
due to Netflix and these series dirty money
and how that stuff isn't really necessarily
applicable to HSBC Canada.
But today I wanna talk very, very quickly
about whether or not you should consider
the 0.99% interest rate,
and who, what type of borrower this mortgage is set up for.
So, let's talk first about the fact
that it is an insured mortgage rate.
So in other words you need to be putting less than 20% down.
We've also been told that this mortgage is only available
if you're getting CVC Insurance.
So therefore you will not be able to qualify
up to your maximum mortgage amount.
You'll only be able to qualify
based on the CMHC guidelines,
which means you'll be able to qualify to purchase less
for this product than you would
if you were getting a normal variable rate mortgage
that could be insured other through Sagan
or through Canada guarantee.
Sagan of course being
what was formerly known as general financial.
Now, in addition to the insurance,
it is also a variable rate.
So, you need to be the type of borrower
who is willing to have an interest rate that can fluctuate.
Now the bank of Canada has said,
and they've reiterated
that they aren't going to move rates till 2023.
But what happens when they do move rates?
And are you going to be the type of person
who can handle the fact that your payment may fluctuate
or that the amount of interest
that you're paying may fluctuate
when they do start increasing rates.
Because the one thing that you don't wanna be
is the type of borrower who is going to wanna lock in
after year three into this type of mortgage
because the lock-in rates with HSBC are going to be
maybe a little bit higher
but they're also going to come with
a pretty substantial penalty once you do lock in.
So, if you are borrowing at 0.99%,
you wanna be sure that you're the type of borrower
who is going to stick with a variable rate plan
for the long-term
not just for the first year or the first two years,
not just for the first three years
but throughout the entire term this mortgage.
And if that is you,
if you're the type of borrower
who can handle the fluctuation in payments
and is okay with the fact
that your interest rate may change overnight,
then this is definitely a mortgage for you.
Now, it's not the type of mortgage for you
if it's gonna keep you up at night
knowing that your interest rate may change.
It's not the mortgage for you
if you're planning on putting more than 20% down,
and it's not the mortgage for you
if you think that you may be the type of person
who's going to lock in the variable rate
into a fixed rate mortgage.
If you're any of those things,
then there are other products out there
that are better for you.
And keep in mind that on the average home in Canada,
we're only talking about a 50 to a 100 dollars
savings per month.
That's less than what most people spend
at Starbucks in a month.
So there are definitely better options out there for most
people at a slightly higher price,
but mortgages that will provide a lot more comfort,
a lot more safety and certainly be better products
in the long run. So, that's it.
That's the type of person that should be borrowing a 0.99%
variable from HSBC.
If you found this quick and dirty video
pun intended for dirty money,
if you found this quick and dirty video useful do me that
favor hit the subscribe button, hit that notification bell
and please hit that like button for the YouTube algorithm.
I will see you again tomorrow, cheers.