TD Bank Mortgage Rates & Reviews
TD Bank’s Background
TD Bank is one of the largest banks in Canada in terms of assets and market capitalization, and is recognized as one of Canada’s big 6 banks. This makes TD a tier 1 bank among Canada’s Chartered Banks. TD has operations all across Canada and across the East Coast of the United States, in addition to a presence worldwide. As of July 2021, TD Bank is the third largest company in Canada with its market capitalization being over $150 Billion. In fact, TD Bank is the 12th largest bank in the world and one of the 10 largest banks in the USA. TD provides a diversified portfolio of financial services to its broad customer base, including: retail banking, commercial banking, wealth management, capital market services, and insurance. With over 1200 branches and 89,000 employees, TD serves over 9 million customers.
TD Bank Fixed Mortgage Rates
A TD Bank fixed rate mortgage can help reduce the risk of interest rates moving up in the future, by allowing you to lock in the current interest rate over your entire mortgage term. This can give peace of mind to homebuyers since the interest rate on their mortgage will not rise if interest rates do, however they will not benefit if interest rates go down. If you get pre-approved for a fixed rate mortgage on a future or current home, the interest rate will be guaranteed for 120 days. Even if interest rates go up during that time, you will be guaranteed the lower rate still.
| Term | Rate | Monthly Payment |
|---|---|---|
1-Year Fixed | 5.79% | $2,508 |
2-Year Fixed | 5.64% | $2,474 |
3-Year Fixed | 5.39% | $2,416 |
4-Year Fixed | 5.92% | $2,539 |
5-Year Fixed | 5.24% | $2,381 |
6-Year Fixed | 6.31% | $2,633 |
7-Year Fixed | 6.42% | $2,659 |
10-Year Fixed | 6.66% | $2,718 |
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.
TD Bank Variable Mortgage Rates
A TD Bank variable rate mortgage provides you with fixed payments over your mortgage term; however, the interest rate will fluctuate with any changes in TD Bank's prime rate. If TD’s prime rate goes down, less of your payment will go towards your interest and more of your payment will go towards paying off your principal. If TD's prime rate goes up, more of your payment will go towards interest costs and less will go towards your mortgage principal. As a result, this can be a great financial tool for those expecting interest rates in Canada to fall in the upcoming year. Another option may also be a convertible mortgage, which is a variable rate mortgage that allows you to convert to a fixed rate mortgage at any time.
| Term | Rate | Monthly Payment |
|---|---|---|
5-Year Variable | 5.20% | $2,372 |
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.
TD Bank’s History
TD Bank has a long history dating back to the middle of the 1800s, when both The Bank of Toronto and The Bank of Dominion were founded. In 1955, both the Bank of Toronto and the Bank of Dominion merged to create what TD is today, which is the Toronto-Dominion Bank.
TD’s Posted Rates
TD Bank’s posted rate is important because it is the official rate that is used when a mortgage break penalty is calculated. A mortgage break penalty is a fee that you will be charged if you are to break your mortgage contract or you want to refinance your mortgage early.
How TD Bank Calculates a Mortgage Break Penalty
TD will either use a method called the interest rate differential to calculate your penalty, or will charge you 3 months worth of interest, whichever amount is higher.
The interest rate differential method works by comparing your current mortgage interest rate (minus any discounts you may have got on your mortgage) to the posted rate that has the most similar mortgage term. The posted rate term you use isn't based on the original mortgage term you got, instead it's based on how much time is left on the current term.
Example:
You have $300,000 remaining on your current mortgage, and there are 3 years left on your mortgage term. The rate you got when you took out the mortgage was 3.90%, and you didn't receive any discounts. TD's posted rate for a 3-year mortgage term is 3.49%, which means there is a 0.41% difference between your mortgage rate and the posted rate. Your mortgage break penalty would therefore be 0.41% multiplied by the 3 years you have left on the mortgage and your mortgage amount, meaning your mortgage break penalty is $3690.
TD Mortgage Features
TD’s Increase Your Mortgage Payment
With this feature you are able to make one extra TD mortgage payment for one month every year in addition to your normal monthly payment, without a penalty. by up to 100% once every year. This payment will go directly to paying down your mortgage principal. This is one of the ways that TD helps you to pay off your mortgage faster, in addition to an annual lump-sum mortgage prepayment amount, and through the option to speed-up your mortgage payments from monthly payments to bi-weekly or weekly payments.
The big 6 Canadian Banks offer options to help you pay down your mortgage quicker, with all the banks except for BMO allowing you to make extra voluntary monthly payments:
| Bank | Feature | How Often Can You Use It? |
|---|---|---|
| RBC | Include an additional monthly mortgage payment in-addition to your regular payments. | Every Month |
| TD | Include an additional monthly mortgage payment in-addition to your regular payments. | Once Per Year |
| Scotiabank | Include an additional monthly mortgage payment in-addition to your regular payments. | Every Month |
| BMO | Permanently increase your monthly mortgage payment by up to 20%. | Once Per Year |
| CIBC | Include an additional monthly mortgage payment in-addition to your regular payments. | Every Month |
| National Bank | Include an additional monthly mortgage payment in-addition to your regular payments. | Every Month |
TD Annual Mortgage Prepayment
You are able to prepay up to 15% of your original mortgage principal on a closed mortgage in one lump sum payment every year. This will help to reduce your interest payments and help you pay down your mortgage much faster, considering that all of your pre-paid lump sum amount will go towards the mortgage principal. If you want to pay down more than 15% of your mortgage principal, you will be charged a penalty. This means that if you plan on paying back your mortgage very aggressively, an open mortgage might be the better option for you.
All 6 big banks in Canada offer similar pre-payment amounts per year, ranging from 10% all the way up to 20% of your original mortgage principal:
| Canadian Bank Closed Mortgage Prepayment Amounts | |
|---|---|
| RBC | 10% |
| TD Bank | 15% |
| Scotiabank | 15% |
| BMO | 20% |
| CIBC | 20% |
| National Bank | 10% |
TD Payment Pause:
With this mortgage feature, you are able to skip your mortgage payment for the equivalent of 1 month. These skipped payments do not need to be in consecutive order, meaning you have the option to skip any 4 weeks during the year if you pay weekly, and any 2 bi-weekly periods if you pay bi-weekly. You will also have the option to skip these payments in full or partially. You are able to use this feature once per calendar year, for a total of 4 times over your full amortization period.
Every time that you skip over a mortgage payment, the interest during this period will be added back to your principal balance. This will mean that over time you will owe more interest, because this balance that is added back also accrues interest. This means that payment pauses are not great to use if your financial situation is unchanged and in good order because it will mean more interest over the long-term. However, if a situation arises such as a death, job loss, or unexpected expense, payment pauses can offer important temporary payment relief.
| Bank | How The Feature Works |
|---|---|
| RBC | Every 12 months you can skip up to 1 month’s equivalent of mortgage payments. |
| TD Bank | Once per year you can skip the equivalence of 1 month of payments partially or in full. |
| Scotiabank | You can skip one mortgage payment as long as you have doubled your monthly payment at least once over your term. |
| BMO | Every 12 months you can skip up to 1 month’s equivalent of mortgage payments. |
| CIBC | CIBC does not offer this feature. |
| National Bank | National Bank does not offer this feature. |
TD Payment Vacation
Based on how much you have already prepaid your mortgage, you will be able to take up to 4 months off of paying your monthly mortgage payments. This payment vacation is only allowed once per term. This extra long break from paying your mortgage can especially be helpful if you plan on taking a sabbatical from work, continuing your education, or staying home with a new baby.
If you do decide to use this payment vacation, it will mean that the interest over this time will accrue and go towards your mortgage principal, meaning you will pay more in interest over time. This means that your mortgage will be more costly, however it is a feature that can help give you more flexibility for important life moments and decisions.
TD Monthly Property Tax Payments
With most mortgages you will be required to pay your municipal property tax directly through your lender along with your monthly mortgage payments. TD also offers clients who are not required to do this the ability to pay their property tax through the bank. After collecting your property taxes every month from you, TD will then pay your property tax bill on your behalf using this money when the tax is due.
It's usually most common for banks to have mortgage holders pay their property taxes through them depending on:
- If they are a first time home buyer,
- The mortgage terms,
- Down payment amounts, and
- Credit history
The reason banks have many buyers pay property taxes through them is because any missed property tax payments can allow the municipality to put a lien on the property. This lien will be ahead of debt payments that are owed to the banks if you were to file for bankruptcy. Banks have you pay through them to protect against this happening. Besides TD, all other major banks in Canada have mortgage holders pay their property taxes through them.
How It Works
Every month TD will collect 1/12th of your estimated property tax amount for the year. This estimated amount is calculated with your appraised home value and the property tax rate in your city. Each month when you pay TD, the money will sit in a separate account from your mortgage, and then be used to pay your property taxes. If for some reason you owe more property taxes than TD has collected from you, they will advance the money and you will owe interest on it.
Pros & Cons About Paying Property Taxes Through TD
The pros of doing this include:
- You won't forget about your property tax payments, and
- It's easier to budget for
The cons of doing this include:
- You won’t earn interest on your money while you wait to pay your taxes, and
- Since there's usually a cushion built into how much you pay monthly, more of your money will be locked up in the property tax account than needed.
TD Mortgage Protection Insurance
This feature helps mortgage holders help pay off their mortgage in the event of death or critical illness. The most common form of mortgage protection insurance however is mortgage life insurance, which will pay off some or all of your mortgage in the event that the policyholder passes away. Premiums for both types of coverage are set when you get your mortgage and will not increase as long as your mortgage balance does not increase. Since both mortgage life insurance and critical illness insurance are add-on coverages, both are optional. However, they can be helpful to give you peace of mind when getting a large mortgage amount. Premiums on both coverages are charged monthly depending on your age, mortgage amount, and how much coverage you choose to get.
All of the 6 major banks in Canada offer types of mortgage protection insurance when you close on your home. All banks offer mortgage life insurance and critical illness insurance, with some banks offering disability and job loss insurance as well:
| Bank | Coverages Offered | Mortgage Life Insurance Coverage Limits |
|---|---|---|
| RBC | Mortgage Life, Critical Illness and Disability Insurance. | $750,000 |
| TD Bank | Mortgage Life and Critical Illness Insurance. | $500,000 |
| Scotiabank | Mortgage Life, Critical Illness and Disability Insurance. | $1,000,000 |
| BMO | Mortgage Life, Critical Illness, Disability, and Job Loss Insurance. | $600,000 |
| CIBC | Mortgage Life, Critical Illness, and Disability Insurance. | $750,000 |
| National Bank | Mortgage Life, Critical Illness, and Disability Insurance. | $1,000,000 |
TD Mortgage Break Penalty
| Bank | Variable Rate Mortgage | Fixed Rate Mortgage |
|---|---|---|
| 3 Months’ of Interest | Greater of 3 Months’ Interest or the IRD amount |
Interest Rate Differential (IRD) for TD
This is the difference in interest that you owe on the amount of mortgage principal that you have at the time of payment, and the amount you would owe using a similar mortgage rate for a term with similar time remaining. This similar mortgage rate is TD's current posted rate that is offered.
TD Mortgage 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 and purchasing a new home, in which a mortgage transfer will apply. 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 TD's current interest rate for a 3-year fixed rate mortgage?
How is my mortgage penalty calculated?
TD Bank Prime Rate
TD Bank's prime rate is used as the basis for many of TD’s lending products, including mortgages, car loan rates for car loans, and HELOCs. The interest rate on these products are priced by combining the bank’s current prime rate with a spread, which makes up the final interest rate on the loan. This spread is usually positive, which will make the lending product have a higher interest rate than what the prime rate is. However, for some products such as a mortgage, this spread may be negative meaning that you will be paying a lower interest rate than the prime rate over your term.
Current TD Bank Prime Rate: 4.7%
TD Bank Prime Rate History
Since the prime rate is the basis for most loans, the interest rate you pay will either be at a premium or discount to the prime rate, as shown with a mortgage, line of credit, and car loan:
| Mortgage | Line of Credit | Car Loan | |
|---|---|---|---|
| Prime Rate | 2.45% | 2.45% | 2.45% |
| Interest Rate Spread | -0.25% | +1% | +2% |
| Total Interest Rate | 2.25% | 3.45% | 4.45% |
Other TD Products
TD Bank offers mortgage products for all types of needs, including a mortgage for a rental property, a vacation home, for someone who's self-employed, a mortgage with cash back, and mortgages in the US for Canadians. Other products for homeowners include TD Home Insurance, which provides coverage for your property.
TD Rental Property Mortgage
For those looking to purchase a rental property with 1 to 4 units you may need as little as 5% down depending on the purchase price and if you are living in a unit. The reason you will need to live in a unit to have this low of a down payment is so that you can qualify for mortgage insurance. For units of 5 or more, you may need at least 25% of the appraised value for a down payment without CMHC insurance, or as little as 15% with it.
Factors to Consider When Purchasing An Investment Property
Property Location: When purchasing a property, one of the only aspects about it that you won't be able to change about it is the location. This means that when you are searching for a rental property, scouting out and finding one in a good neighbourhood with local amenities, low crime, and good job prospects can make for a more stable, long-term investment.
Associated Costs: Owning a rental property will have many costs associated with it, including:
- Home insurance: This will protect your property from damage while the cost will depend on the coverage you choose, where the property is located, the type of property it is, and its age.
- Repairs & maintenance: You will need to maintain the property, which includes the structure and the land it's on. Repair expenses are hard to plan for, since it's hard to tell when something on the property will break.
- Property taxes: You will pay this no matter what city you live in, and it will depend on your appraised home value and the property tax rate where the property is located.
- Vacancies: Since your property will likely have some tenant turnover, you will have to consider the cost of not having a tenant in the property paying rent.
- Administrative costs: These costs are associated with running a rental property, which includes drafting rental agreements, checking tenant credit histories, and the day-to-day expenses related to managing the property.
Being aware of all of these costs can be very important when you are deciding if purchasing a rental property will be a good investment or not.
Time Commitment: If you do decide to run and manage the property yourself without the help of a property management company, you should plan for the additional time commitment. You will be responsible for collecting rent, renting the property out, and fixing issues your tenants may have. If you decide to hire a property management company instead, it can be another expensive cost with the average property management fee being 8 to 12% of rent.
Price: When you are purchasing a rental property both the price you pay and the average rent it will bring in every month are important in determining the return on investment you will get. The income the property brings in, divided by the purchase price of the home is called the Capitalization rate, better known as the cap rate. Having a higher cap rate on a property may help you generate potentially higher returns from renting, however it may have more risk associated with it in the form of a property needing work or a bad neighbourhood. The price and value you're getting will always need to be considered when making an investment.
Cash Back Mortgage: This program will allow you to get 4% to 5% of your mortgage amount in a lump sum cash loan for up to $25,000 when you close on your home and mortgage.
Qualifying for a Cash Back Mortgage
In order to get a cash back mortgage, it will depend on the following terms:
- Your credit history,
- Mortgage terms,
- Mortgage amount,
- Income, and
- If your occupying the home or not
If you do qualify, you will be able to get the following amounts in a lump sum payment with your mortgage:
| Mortgage Amount | 4% Cash Back | 5% Cash Back |
|---|---|---|
| $200,000 | $8000 | $10,000 |
| $400,000 | $16,000 | $20,000 |
| $600,000 | $24,000 | $25,000 |
| $800,000 | $25,000 | $25,000 |
Pros & Cons of Cash Back Mortgages
Cash back mortgages have both pros and cons, especially depending on your financial situation:
| ✔ Pros | ✖ Cons |
|---|---|
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TD Vacation Home Mortgage
Depending on your situation and if you or family members plan to live in the home, you may be able to purchase a second property with a high ratio mortgage, which allows you to put a down payment as little as 5%. If you or a family member does not plan on living in the home however, you will need a 20% or higher down payment.
High Ratio Vacation Homes
If you plan on living in the home you purchase or plan on having a family member live there rent-free, you will be able to get the mortgage insurance you need to be eligible for a high-ratio mortgage. Although this means you will be able to purchase with a down payment of less than 20%, it's important to consider the costs of a second home, and if you can afford it and pass a mortgage stress test.
Refinancing to Cover Your Down Payment
If you do already own a home, you will have extra options for how you fund the purchase of a vacation home. This can include refinancing your existing property to take out equity and use it for a down payment. This would allow you to fund your down payment without having to save up 20% in cash.
Tax Considerations When Buying a Vacation Home
If you do decide that you will use your vacation home as your permanent residence, you will be capital gains tax exempt when you do decide to sell it. If you aren't using your vacation home as your primary residence, you will owe capital gains taxes if you sell the property for more than your adjusted cost basis on it. Your adjusted cost basis is the cost you paid for the home, in addition to the cost of renovations.
TD Self-Employed Mortgage
Although TD does not have a designated self-employed mortgage application, those who are self-employed are still able to get a mortgage. The main difference to consider is that your mortgage request may require extra documentation and more information on your business or self-employment status.
To get a mortgage being self-employed you will need the following:
- A good credit score with a good credit history,
- Sufficient income for the mortgage amount you are applying for,
- Your last 2 Notice of Assessments, and
- Information on your assets & liabilities
In addition, you will likely need other supporting documents including business financial statements, proof of tax payments, and proof of your ownership status.
Big 6 Bank’s Self-Employed Mortgages
All 6 big banks in Canada offer options for self-employed people to get mortgages. The amount you will be eligible for and your minimum down payment will differ, however:
| Bank | What You Will Need | Down Payment Amount |
|---|---|---|
| Royal Bank |
| 20% with no mortgage insurance, 5% - 19.99% with mortgage insurance. |
| TD Bank |
| 20% with no mortgage insurance, 5% - 19.99% with mortgage insurance. |
| Scotiabank |
| Minimum down payment of 10%. |
| BMO |
| 20% with no mortgage insurance, 5% - 19.99% with mortgage insurance. |
| CIBC |
| 20% with no mortgage insurance, 5% - 19.99% with mortgage insurance. |
| National Bank |
| Minimum down payment of 10%. |
TD US mortgage
With over 1200 branches across 16 states and Washington DC, TD makes getting a US mortgage much easier for Canadians. TD Bank will allow you to leverage your Canadian and American credit history, assets and income in order to get a mortgage. This can make purchasing a home possible, considering other US banks without a presence in Canada would not be able to leverage your credit history from Canada.
Without leveraging your Canadian credit history and without US credit history buying a home is very hard. Even if you can find a lender who will lend to you, it's most likely they would require you to make a hefty down payment.
What US States Does TD Have Branches In?
With a presence in 16 states, TD can help with any of your banking needs if you decide to purchase using a loan from them in the US. TD operates in the following states:
| Connecticut | Delaware | Florida | Maine |
| Maryland | Massachusetts | New Hampshire | New Jersey |
| New York | North Carolina | Pennsylvania | Rhode Island |
| South Carolina | Texas | Vermont | Virginia |
What You Will Need For a TD US Mortgage
In order to apply for and close on a mortgage in the US with TD Bank, you will need the following:
- Valid Passport(s) and Drivers License(s)
- A confirmation of income and your past 2 Notices of Assessment
- For salaried workers, you will need T4 Slips and your current pay stub,
- For self-employed workers, you will need a T1 General,
- For retirees, you will need pension statements & a T1 General
- Purchase & sale agreement,
- Confirmation of a non-borrowed down payment,
- Confirmation of homeowners insurance at close
TD HomeEquity FlexLine
This is a mortgage solution which combines a home equity line of credit (HELOC) with your mortgage. As you pay down your mortgage amount and your equity grows, your line of credit limit will also increase. In total, you may be able to borrow up to 80% of the value of your home once it is fully paid off. Since it is a line of credit secured on your home, the interest rate is much lower than other unsecured line of credit products. As well, you have the option to pay it off in full or just pay the interest.
Potential Uses for the TD HomeEquity FlexLine
Because it offers much lower interest rates than many other TD credit products, it could be a good idea to use for the following:
- Debt consolidation,
- Home improvements,
- Education costs, and
- In case of an emergency
As well, using a HELOC can also be a strategy to invest with, such as with the Smith Maneuver Tax Strategy.
Big 6 Bank Offerings
| RBC Homeline Plan | TD Home Equity FlexLine | Scotia Total Equity Plan |
| BMO Homeowner ReadiLine | CIBC Home Power Plan | National Bank All-In-One |
TD Mortgage Pre-Approval
Getting pre-approved on a mortgage is when you fill out an application to see if a lender is committed to providing you a mortgage, and at what terms. The application process will involve you providing TD with the information they need to determine how much they are willing to lend you. Common information you can expect to provide TD with on your application include:
- Your employment status,
- Income level,
- Down payment amount, and
- Your assets and liabilities
The reason getting pre-approved is important to do before you start your housing search is so that you know how much you can spend. Since a mortgage pre-approval can provide you with a mortgage term, interest rate, and principal amount, it can be very helpful when choosing your budget. When you are ready to start the house buying journey and get pre-approved, you have the option to start the application process both online or in person at a branch. In addition, you will also need to prove you have Canadian home insurance to receive the final mortgage. Especially if you are a first time home buyer, meeting with a mortgage specialist in person can help you take your next steps in the home buying process.
What to Bring For Your In-Person Pre-Approval Meeting
To be ready to start your application, it is recommended to bring the following documents and information:
- Current & previous addresses,
- Employment information such as your employers address and telephone number,
- Previous employment information,
- Proof of income such as a pay stub,
- Recent bills or credit card statements,
- The estimated value of your home, and
- Monthly housing expenses
When Should You Get Pre-Approved?
It is recommended that you get pre-approved before you start making offers on homes and seriously start your housing search. This will help provide you with all the information you need for your budget, and will allow you to make offers on homes that are not conditional on getting financing (because you already will have a commitment to finance your mortgage).
| ✔ Benefits of Getting Pre-Approved ✔ |
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TD Mortgage Contact
TD Bank offers you the convenience to call and speak with a mortgage representative by calling the number: 1-877-230-6275. For help finding branches or ATMs near you, TD’s branch locator can help you find a branch in any city and nearby your current location. TD Bank usually will have a large branch presence within the downtown core of any major and medium sized city in Canada. The bank is the 2nd largest in Canada based on the number of branches it has, meaning finding a branch anywhere across the country will be very easy. All cheques from TD have the financial institution number 004. The branch locator page also gives you information on each branch, such as the hours of operation, the languages that are spoken at the branch, and other features the bank has, including if it has free WIFI and ATM’s. You are also able to book a meeting, so that you can better plan your trip to visit the branch.
TD Bank Reviews
As a way to get more information on what getting a mortgage and banking with TD is like, we looked through many reviews on various review websites. Considering that TD Bank operates across countless business lines, these reviews will only reflect the overall quality of service TD provides.
Average Review Result: 3.6/5 from 4293 total reviews
Consumer Affairs: 3.6/5 from 488 reviews
Wallethub: 3.6/5 from 3766 reviews (includes TD Bank USA reviews)
InsurEYE: 3.8/5 from 39 reviews
Pros & Cons of TD Bank
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TD Mortgage Deferral
With many of the COVID-19 related programs coming to a close, you aren't able to make a new request for a mortgage deferral with TD. This is similar to the rest of the big 6 banks, where COVID-19 related programs have ended as lockdowns have eased and employment starts to recover across Canada.
If you are still being financially impacted by the effects of COVID-19, TD is here to help you through it, with the following options for your mortgage:
- Changing Your Payment Amounts: if you have increased your monthly payments in the past, you may be able to decrease these monthly payments back.
- Adjusting Your Payment Frequency: This can help you to better manage your other expenses with your mortgage payments, and you can change your payments to be weekly, bi-weekly, or monthly.
- Using a Mortgage Feature: TD offers features such as the ability to pause 1 month of mortgage payments within a 12 month period. This may help you manage short term difficulties.
- Refinancing: you may be able to consolidate other debts into your mortgage or a HELOC, where you might pay less interest.
If you are having trouble financially, reaching out to your local TD branch to get more information on these and other options can be a good step to take.