Tangerine Mortgage Review (2024)
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With house prices in Canada projected to fall from their peaks in 2022, it is a good time to either get on the housing ladder. If you are looking for the best providers, Tangerine Bank has got you covered with some of the lowest rates in the industry.
Tangerine has set itself apart from other banks by catering to the needs of those in the digital era. Applications are processed exclusively online, the interface is easy to use, and the prices are hard to beat. In this review, we will help you understand the products they have to offer and how to get started.
Tangerine mortgage key takeaways
- Some of the cheapest rates available
- An array of helpful prepayment options among other features
- Portability of mortgage products
Tangerine mortgage review: A great online lender
Tangerine bank was originally founded in 1997 as ING Direct Canada. It was later acquired by Scotiabank in 2012 and changed its name another two years later in 2014. With over 2 million customers, Tangerine has rapidly grown to become one of the most popular banks in Canada.
Possessing a fully integrated online service, Tangerine offers a wide range of products and services, including:
- savings accounts
- chequing accounts
- GICs
- mortgages
- personal loans
- credit cards
- and investment accounts.
The bank is known for its user-friendly online and mobile banking platforms, which make it easy for customers to manage their finances on-the-go. They can rest easy knowing their funds are overseen by Scotiabank, the third largest banking institution in Canada, and that Tangerine is a member of the Canada Deposit Insurance Corporation. The company has over 1,200 employees and manages around $38 billion in assets from its headquarters in Toronto.
Anyone entering into the financial commitment of a mortgage needs to make sure they are doing what makes the most sense for them and their unique set of circumstances. Tangerine offers a competitive mortgage service with many advantages but there are some drawbacks too. Let's take a look:
Pros
- Everything is online. This means you don’t have to pay expensive overheads for in-person services you don’t actually use.
- Flexible prepaid options.
- Competitive interest rates.
- Life insurance add-ons available.
- Tangerine rates are more competitive than many Canadian banks.
Cons
- Everything is online, which means there are no branches you can go to to troubleshoot your application, although these services are available remotely.
- Tangerine offers exclusively collateral charge mortgages, making it more costly to transfer your mortgage to another lender.
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What types of mortgages are available from Tangerine?
Tangerine Bank provides both fixed rate and variable rate mortgages. The suitability of one product compared to the other depends upon the needs of the buyer, but each has their advantages and disadvantages. It is important to note that both of these formats are collateral charge mortgages at Tangerine. This means that your loan amount is against 100 percent of the property’s value, as opposed to the value of the loan itself.
Tangerine fixed mortgage rates
A fixed rate mortgage will have a stable interest rate that will remain the same for the duration of your mortgage term, and is the most common type opted for in Canada. Tangerine Bank offers mortgage terms that range anywhere from 1-6, 7 and 10 years respectively. Before purchasing such a product, consumers have a 120 day lock-in period where they can guarantee their prices will stay the same before opting for the mortgage product.
Tangerine’s fixed mortgage rates of interest at the time of writing in early 2023 were:
| Mortgage Term | Interest Rate |
|---|---|
| 1 Year | 6.54% |
| 2 Year | 6.15% |
| 3 Year | 5.74% |
| 4 Year | 5.74% |
| 5 Year | 5.74% |
| 7 Year | 6.19% |
| 10 Year | 6.59% |
Good to know
Interest rates are dynamic and can change frequently. For up-to-date data it's important to check mortgage rates or speak with mortgage broker.
Tangerine variable rate mortgages
At the time of publication, Tangerine offers one form of variable rate mortgage, with a five year term set at 6.65 % interest.
Some consumers will opt for a variable rate mortgage, especially if they think interest rates are going to go down and they have sufficient capital to manage their expenses should the opposite happen. Buyers of a variable rate mortgage have a degree of protection with Tangerine, where they can lock in the size of their monthly fees for the duration of their term. The flipside is that they may find themselves paying off more interest than the principal balance should interest rates go up, resulting in longer mortgage terms in the future.
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What are the eligibility requirements for a Tangerine mortgage?
Tangerine mortgages are available to Canadian residents living in Alberta, British Columbia, Quebec Manitoba, Saskatchewan, as well as the Atlantic provinces and territories. To be eligible, you’ll need to meet the following criteria:
- Be a Canadian Resident.
- Be at least 18 years old (or 19 in certain provinces).
- Apply for a loan of $50,000 or more.
- At least 3-months of full-time employment or 2-years of stable self-employment history with proof of income and other relevant financial information.
- A minimum credit score of 620 without derogatory history.
- No prior bankruptcies.
How can I apply for a mortgage with Tangerine?
It all begins with a conversation.
Step 1: Give Tangerine a call at 1-888-826-4374 between 10 am to 8 pm Mondays to Fridays, where you can discuss your needs, your finances and look at the options available to you.
Step 2: At the end of your call, you should have an interest rate locked in for 120 days. Use the time to get your affairs in order and ensure this is the right mortgage for you.
Step 3: Fill out your application and begin corresponding with your dedicated mortgage specialist. They will answer any questions you might have!
Before settling on a lender it pays to compare! A mortgage is one of the largest and longest financial commitments most people ever make.
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Why choose Tangerine for your mortgage?
What sets Tangerine apart is that they are online and they are cheaper, but there are some more details as well that you should familiarize yourself with when looking at the mortgages they offer.
Here are Tangerine' key mortgage features:
- Great rates: Tangerine offers mortgage rates cheaper than much of the competition, including TD Canada Trust, Scotiabank, Royal Bank of Canada and the Bank of Montreal among other providers. They also boast a 120 day lock in period.
- Portable mortgage: If you end up moving houses, you can take your mortgage with you penalty free at your current rate, term and loan amount.
- Flexible prepaid options: Every year, you can make lump sum prepayments up to 25% of your original Mortgage amount, and increase your regular Mortgage payments by up to 25% of your original Mortgage payment. You can do this on any payment date. You can also increase your monthly payments by up to 25%.
- Dedicated support: You’ll have a specially assigned Mortgage Account Manager to help you every step of the way and to answer any questions that might arise while you are a Tangerine customer.
- Life insurance add-ons: Tangerine provides customers with life insurance policies in partnership with Canada Life which will pay off part or all of your mortgage in the event of death. Coverage usually extends up to $500,000.
What are Tangerine’s Mortgage fees and penalties?
Whether you are breaking a mortgage in order to obtain a lower interest rate or because you want to pay it off early, you’ll usually have to pay some fees in what is known as a mortgage break penalty.
Tangerine Bank uses a common method in the industry to determine what that penalty would be, which is called the ‘interest rate differential method.” In this case, your penalty is determined by the difference between the interest rate on your mortgage, and the current Tangerine bank posted rate for the amount of time remaining. This difference is then multiplied by the amount of time in months left on your current mortgage to get your Tangerine mortgage break penalty.
Let's take a look at how it works:
For example
Janet is four years into a five year fixed term mortgage for $500,000 at 5.74% and has just inherited $250,000. She wishes to pay this inheritance up front towards part of her mortgage. She opts to use Tangerine’s mortgage prepayment calculator to see how much this would cost.
Her prepayment charge will be $1,772.67. This may seem like a lot, but it will ultimately save her considerably on interest.
How much can I borrow with Tangerine?
Generally speaking, Tangerine Bank requires down payments for properties of $500,000 and less of at least 5%.
That would mean in a best case scenario if the property you were trying to buy was exactly $500,000, you would be able to borrow $475,000 providing you could come up with a down payment of the first 5%, i.e. $25,000. After that, the litmus changes a bit.
The amount that you can borrow generally depends upon a number of different factors, including your credit and financial history and your income.
Here is a table to help you make sense of it all:
| Purchase price | Minimum down payment required |
|---|---|
| $500,000 | $25,000 |
| $600,000 | $35,000 |
| $700,000 | $45,000 |
| $800,000 | $55,000 |
| $900,000 | $65,000 |
| $999,999 | $75,000 |
| $1,000,000 | $200,000 |
For more information on pricing, try using our mortgage affordability calculator.
How do I contact Tangerine about a mortgage?
While Tangerine does not have branches, contacting them over the phone is easy at 1-888-826-4374. They can be reached anytime between 10 am to 8 pm Mondays to Fridays.
Alternatively, you can talk to their chatbot online or consult the FAQ page on their website for more information.
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