Marathon Mortgage Rates & Reviews
Marathon Mortgage Corporation (MMC) is a private mortgage lender and mortgage servicer. Marathon was founded in 2011 and is headquartered in Toronto. Similar to some other lenders like B2B Bank and RMG mortgage, Marathon offers its mortgages through mortgage brokers.
MMC is a monoline lender among Canadian B-lenders. MMC is an alternative lender which is mainly focused on prime borrowers.
Marathon offers fixed-rate mortgages, adjustable-rate mortgages, and cash-out refinance. It is willing to pay your legal fee (up to $300) and capitalize your mortgage break penalty and discharge fee (up to $3,000) if you transfer your mortgage from another financial institution to MMC.
Maraton mortgages are portable and assumable. MMC mortgages are only available for owner-occupied properties with up to 4 residential units.
| Term | Marathon Mortgage Rate | Canada's Lowest Rate |
|---|---|---|
2-Year Fixed | 5.64% $2,474/mo | - |
3-Year Fixed | 5.44% $2,428/mo | - |
4-Year Fixed | 5.29% $2,393/mo | - |
5-Year Fixed | 4.99% $2,324/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
The Mortgage Rate and LTV
We pay interest for using and enjoying someone else's money. Each interest rate comprises a risk-free rate and a risk premium. The risk-free rate is the time value of money, while the risk premium is the compensation paid to a lender for the possibility that they won’t be paid back.
A collateral is a security left with the lender to reduce the risk they won’t be paid back. Collateral would allow borrowers to access a significantly lower interest rate. A secured loan whose collateral is real estate is called a mortgage. To assess the security provided by the collateral, lenders often look at LTV. LTV stands for loan to the value of collateral, which in this case is real property.
In general, the lower the LTV, the lower the risk to the lender. For several reasons, a lender might not be able to get the full price of collateral if the loan does not perform and the lender has to sell the collateral. The market always fluctuates, and the collateral might lose part of its value.
When the collateral is residential real estate, the lender has to evict the homeowner before selling it; someone about to be thrown out might be angry and mistreat the home. Also, a homeowner who can’t pay their mortgage almost certainly can’t pay for the maintenance and upkeep of their property. And a home that is not well maintained would lose part of its value.
Last but not least, a lender would likely face significant legal and administrative costs if they have to go through the foreclosure process. Because of all the aforementioned risks, Canadian law forbids mortgage lenders from lending with LTV greater than 80% unless the mortgage is insured against default.
Foreclosure Costs
Foreclosure is especially costly in BC, Alberta, Saskatchewan, Quebec, Manitoba, and Nova Scotia, where a judicial foreclosure is required. The cost of foreclosure is significantly lower in Ontario, New Brunswick, Newfoundland, and PEI, where foreclosure is performed via a power of sale. In a judicial foreclosure, the lender needs to receive a court order which transfers the title to the lender before selling the property. While in a power of sale, the lender sells the property on behalf of the borrower and uses the proceeds to pay the borrower's debt on their behalf.
As a result, mortgages with an LTV greater than 80% are often called insured mortgages and are considered quite safe for the lender because they are insured against any loss due to default. Insured mortgages have the lowest mortgage rates in Canada. Lenders like Marathon Mortgage Corporation are taking on the highest risk for mortgages with an LTV of 80%. This level of LTV also corresponds to the highest mortgage rates. As LTV declines, the lender's risk and, thus, the mortgage rate decline.
At an LTV of 65% or less, which corresponds to a down payment of 35% or more, little risk is perceived by the lender. Thus you can expect Marathon Mortgages to lower its rates as you increase your down payment and charge you the same rate as an insured mortgage with a down payment of 35% or more.
MMC Mortgages are Portable
Porting a mortgage means changing the collateral of a mortgage. Porting allows you to sell your home and use the proceeds to purchase your next home. If your lender does not allow the portability of their mortgages, you would have to pay back your old mortgage (which would likely entail paying a mortgage break penalty) and obtain another mortgage for your new home.
Porting a mortgage is very beneficial to the borrower if current mortgage rates are materially higher than the borrower’s current mortgage rate. But if mortgage rates have fallen, you would benefit from paying back your high-rate mortgage and getting a new lower-rate mortgage. Unfortunately, you must repay your interest rate savings in the mortgage break penalty.
MMC Mortgages are Assumable
Assuming a mortgage means that a mortgaged house is sold, but the mortgage is not paid back, nor is the collateral exchanged with another property. The buyer would take responsibility for the mortgage and subtract the mortgage balance from their purchase price. This option could be very beneficial. If the ongoing mortgage interest rates are higher than the home’s mortgage rate, the buyer can benefit from a loan with a lower mortgage rate. Because of this benefit, the buyer might be willing to pay more for the house.
If current mortgage rates are lower than the seller’s mortgage rate, the buyer would likely be unwilling to assume the mortgage. In this case, the seller would probably have to pay a very sizable mortgage break penalty. In any case, allowing someone to assume your mortgage is a risky business. The buyer should apply to the lender and qualify for the mortgage before assuming a mortgage. Yet if, for any reason, the buyer stops paying the mortgage, the seller would be on the hook. So it's best to think twice before letting anyone assume your mortgage.
Marathon Mortgage Reviews
Customers of MMC, which are mostly mortgage brokers, seem to be quite happy with the services and products of Marathon Mortgages, as Google's review score for MMC averages 4.4 out of 5.