Tangerine Bank Mortgage Rates & Reviews
Tangerine Bank Background
Previously known as ING Direct Canada before changing its name in April 2014, Tangerine Bank is a Canadian online bank. The company offers a full suite of products with competitive rates and offers, including their no-fee Tangerine chequing and savings bank accounts, Tangerine credit cards, guaranteed investment certificates (GICs), mortgage products, and mutual funds. To compete with larger financial institutions, Tangerine mortgage rates are some of the lowest in the industry. In 2012, when Tangerine was known as ING Direct Canada, it was purchased by Scotiabank. Tangerine is still part of Scotiabank today, and has its headquarters in Toronto. Since Tangerine is an online bank in Canada, there are no current branch locations, however people banking at Tangerine will have access to the over 3500 Tangerine ABM’s through Scotiabank’s network. With the combination of Tangerine’s ownership by Scotiabank, which is the 3rd largest bank in Canada, and with Tangerine being a Canada Deposit Insurance Corporation member, Tangerine is very safe to bank with. Tangerine has multiple ways of banking with them, including over the Tangerine Bank app, at an ABM, or over the internet. Tangerine Bank Canada currently employs over 1200 employees across its business lines in retail banking, and manages close to $38 billion in assets.
Tangerine Bank Mortgages
The two main types of mortgages Tangerine offers are fixed rate mortgages and variable rate mortgages. All of Tangerine’s mortgage products are collateral charge mortgages, which will mean your loan amount is registered for 100% of the properties value. This may save you money refinancing, but will make it harder to transfer to another lender.
| Collateral Charge Mortgage | Conventional Charge Mortgage | |
|---|---|---|
| Refinancing & Adding a HELOC | You will be able to refinance and add a HELOC without the added legal costs of adding another charge. | You will need to register another charge for a HELOC, and discharge and register a new charge to refinance. |
| Transfering to Another Lender | You will require additional legal costs to transfer mortgages to another lender. | You will be able to transfer to another lender with no legal fees. |
| How Much is Registered? | The entire property value | The loan amount |
Tangerine Bank Fixed Mortgage Rates
A Tangerine fixed rate mortgage will help protect you from the potential risks of future interest rates rising, by allowing you to keep the same interest rate over your entire mortgage term. This will provide you with comfort and peace of mind, especially for first time home buyers who have a large mortgage balance owing. When you are getting pre-approved for a mortgage, you will have the benefit of having 120 days with your Tangerine mortgage rate locked-in before purchasing.
| Term | Tangerine Rate | Canada's Lowest Rate |
|---|---|---|
1-Year Fixed | 7.29% $2,874/mo | - |
2-Year Fixed | 6.39% $2,653/mo | - |
3-Year Fixed | 5.49% $2,439/mo | - |
4-Year Fixed | 5.49% $2,439/mo | - |
5-Year Fixed | 5.44% $2,428/mo | - |
7-Year Fixed | 6.00% $2,559/mo | - |
10-Year Fixed | 6.40% $2,655/mo | - |
The rates shown are for insured mortgages with a down payment of less than 20%. You may get a different rate if you have a low credit score or a conventional mortgage. Rates may change at any time. false
Tangerine Bank Variable Mortgage Rates
A Tangerine variable mortgage gives you the benefit of keeping the same fixed monthly payments throughout your mortgage term. The difference however is that the interest rate on your mortgage balance will change along with the Tangerine prime rate. If the prime rate were to rise, you will have more of your monthly payment going towards interest, while if it falls, more of your monthly mortgage payment will go towards the principal balance. This makes a variable rate mortgage a good option for someone who is expecting interest rates to fall in the future.
| Term | Tangerine Rate | Canada's Lowest Rate |
|---|---|---|
5-Year Variable | 6.80% $2,752/mo | - |
The rates shown are for insured mortgages with a down payment of less than 20%. You may get a different rate if you have a low credit score or a conventional mortgage. Rates may change at any time. false
Tangerine prime rate
Tangerine's prime rate is the same as other big Canadian banks, and will fluctuate with the overnight interest rate, which is set by the Bank of Canada. The current prime rate will directly impact almost all of Tangerine Bank’s products, meaning that you should know what the prime rate is before getting a Tangerine mortgage pre-approval.
Current Tangerine Prime Rate: 7.20%
Some of the products that use the prime rate as a benchmark for determining the actual interest rate on them are:
- Tangerine mortgages,
- Tangerine HELOCs,
- Tangerine bank accounts,
- Tangerine credit cards,
- Tangerine lines of credits, and
- Money in Tangerine investment accounts
How is the prime rate used to calculate the interest rate on a product?
Since the prime rate acts as the benchmark for the interest rate on loans that are given out, different banking products will either have a positive or negative interest rate spread added to the prime rate. As the prime rate fluctuates over time, so do Tangerine banking products, while still keeping a spread. This spread is based on how risky the product is for Tangerine to lend out for, but for bank accounts it is how much Tangerine is willing to offer to attract deposits. For example, a Tangerine 5-year fixed mortgage is usually priced at a discount to the prime rate, which means the spread between the prime rate and the product interest rate is negative. For a higher risk lending product, such as an unsecured line of credit, the interest rate would likely be at a premium to the prime rate by ~1%, meaning that if the prime rate is 2.45%, the interest rate on this product would be 3.45%.
Tangerine Bank’s History
Tangerine Mortgage Break Penalty
| Bank or Lender | Variable Rate Mortgage | Fixed Rate Mortgage |
|---|---|---|
 | 3 Months’ Interest | Greater of 3 Months’ Interest or the IRD amount |
Difference in interest payable between your current mortgage rate and Tangerine’s current comparison interest rate based on the remaining term.
How is a Tangerine mortgage break penalty calculated?
Tangerine uses a method called the interest rate differential method. This method calculates your mortgage penalty by finding the difference between the interest rate on your mortgage, and the current Tangerine bank posted rate with the same time remaining. This difference is then multiplied by the amount of time left on your current mortgage to get your Tangerine mortgage break penalty. To calculate how much your penalty may be, the Tangerine prepayment calculator below can provide you an estimate.
Tangerine Prepayment Calculator
Are you looking to pay off your mortgage early? Or refinance the terms of your mortgage at a lower interest rate? Maybe you sold your home. Whatever the case, you most likely will have to pay a mortgage break penalty set by your lender. Whatever the situation, our calculator will help you determine the cost to break your mortgage so you can be confident about your mortgage decisions.
What is the remaining balance on your mortgage?
What is the term-length and type of your current mortgage?
What is your current mortgage interest rate?
If applicable, what was the rate discount you received when you signed your current mortgage agreement?
When did your current mortgage start?
Who is your current mortgage lender?
What is Tangerine Bank's current interest rate for a 3-year fixed rate mortgage?
How is my mortgage penalty calculated?
Tangerine Products
Tangerine self-employed mortgage
If you are self-employed, you are still able to get a normal mortgage and get the same Tangerine mortgage rate as someone who isn't self-employed. It may be much harder to qualify for a mortgage however, if your income is not steady and you do not have a great credit rating or high down payment to make up for it. If you are looking to get a self-employed mortgage with Tangerine, getting financial paperwork ready, paying off as much debt as possible before, and planning ahead can make this goal a reality.
Tangerine Home Equity Line of Credit (HELOC)
Currently with Tangerine offering this product with an interest rate at 2.35%, which is 10 basis points below the current prime rate, it can be a great low cost way to:
- Consolidate debts,
- Perform a renovation,
- Invest in other assets, or
- As an emergency fund
Tangerine’s HELOC rate has become one of the lowest in Canada since the name change from ING Direct. You will be able to use your Tangerine line of credit at any time without needing to re-apply, and you can pay it off whenever you choose. To save on interest costs, setting a fixed pay schedule can help you to pay off your balance sooner. Using your Tangerine online banking account or the app, you are able to access funds whenever you choose. To get access to this product, you can apply on the Tangerine website, however you will need to have built up home equity to be able to access this HELOC.
Although Tangerine does not offer a readvanceable mortgage product like the big 5 banks do, that will automatically increase your limit as you pay down your mortgage, applying for a Tangerine HELOC is still simple and will give you access to up to 65% of your home's value.
Mortgage Features
Tangerine offers 2 beneficial prepayment features: increase your monthly mortgage payment and prepay a lump sum amount every year.
Increase your Tangerine mortgage payment
Tangerine Bank allows you to increase your monthly payment by up to 25% of your original mortgage payment. Since the full increase in your mortgage payment will go directly to paying off your mortgage principal, it will work to drastically reduce your lifetime interest costs.
Lump sum prepayment
Tangerine offers you the ability to pay down your mortgage much faster and reduce your interest costs by prepaying up to 25% of your original mortgage balance every year. This is higher than the big 6 Canadian banks, which allow you to prepay 10-20% of your original mortgage balance each year.
Tangerine portable mortgages
If you are moving fairly constantly but want to purchase a home to build equity, this feature can be very beneficial. You are able to move over your mortgage on a penalty-free basis if you do move homes, and you are also able to keep the same rate, term, and loan.
Tangerine mortgage life insurance
As a way to keep your home in the event of a tragedy, mortgage life insurance may give you the peace of mind and comfort you need when taking on a mortgage. Tangerine offers this through Canada Life, and the insurance will pay off all or part of your mortgage in the event of death. This is an add-on monthly charge to your Tangerine mortgage, and may especially be helpful for people not able to get individual life insurance, with just 3 health questions before qualifying. You can get up to $500,000 in total coverage for your mortgage, with the following monthly rates per $1000 in coverage:
| Age | Single | Joint |
|---|---|---|
| 18 - 30 | $0.09 | $0.13 |
| 31 - 35 | $0.13 | $0.18 |
| 36 - 40 | $0.20 | $0.29 |
| 41 - 45 | $0.29 | $0.41 |
| 46 - 50 | $0.40 | $0.60 |
| 51 -55 | $0.55 | $0.84 |
| 56 - 60 | $0.73 | $1.09 |
| 61 - 64 | $0.97 | $1.51 |
Tangerine property tax payments
Similar to other Canadian banks, Tangerine may choose to have you pay property taxes through them to your municipality. This will mean the bank estimates your yearly assessment, then has you pay it to them in monthly installments along with your mortgage. When the property taxes are due, Tangerine will pay the amount on your behalf. Although this means you will need to provide Tangerine with the money without earning interest on it before you need to pay your bill, it will also protect you from paying late or not budgeting for the expense.
Tangerine Bank Contact
One of the main downfalls of Tangerine Bank is the inability for you to meet with a mortgage representative in person at a branch, with Tangerine being an online bank. To speak with a Tangerine mortgage representative over the phone, the number is 1-888-826-4374, with someone available to help you Monday to Friday, from 10 am to 8 pm. You can also learn more information about offerings by using the Tangerine chat bot and through the Tangerine frequently asked questions section of their website.
Tangerine Mortgage Review
Tangerine has over 2 million Canadians that bank with them, and the bank has continued to add more members in Canada with its attractive rates across multiple product lines. Some of the pros and cons of banking with Tangerine are the following:
| Pros | Cons |
|---|---|
| Competitive rates on mortgages and other products. | No branch footprint can make the process of getting a mortgage more difficult. |
| Many useful mortgage features and prepayment options. | Tangerine only offers collateral charge mortgages, making it more costly to transfer to another lender |