Lloyds Bank International, Mortgages for Canadians

Lloyds-Bank Canadians looking for mortgages abroad have limited choices. Or more accurately, limited convenient choices.

The UK’s largest Bank, Lloyds Banking Group, has a solution.  Lloyds has recently opened two new offices in Canada and it’s now offering its International Mortgage to Canadians.

Lloyds’ International Mortgage is designed for purchasers of a second home, vacation home or investment property abroad.  One of its big benefits is the ability to be set up in multiple currencies.  You can even change the currency you pay the mortgage in twice a year for free.

Suppose you’re a Canadian wanting to buy in the U.S.  Here’s what you can expect:

  • Maximum Mortgage:  Unlimited
  • Minimum Mortgage:  $150,000
  • Minimum Property Value:  $400,000
  • Maximum LTV:  50% in California, Florida, Nevada, Oregon.  60% in Colorado, Connecticut, Hawaii, New Jersey, New York, Washington State.  70% on exception for high net worth clients purchasing $1 million+ properties.
  • Term:  Fully open. No pre-payment penalties.
  • Credit:  No credit check required
  • Income:  Applicants’ combined income must be no less than 20% of the loan amount
  • Maximum Amortization:  30 years
  • Typical Fees:  1.3% of the loan amount + $360 administration fees. Other fees may apply. Inquire for details.
  • Rate Type:  Variable
  • Pre-approvals:  Yes
  • Mortgage payments:  Made quarterly (no other frequencies are presently available)
  • Interest Rate:  Currently 2.59% over Lloyd’s cost of funds, or 4.32% when paid in Canadian dollars.  Add 0.2% if interest-only.  Current rates.

All paperwork is done remotely.  No visits to a bank are required.

Lloyds also lends in Great Britain, Spain, France, Portugal, New Zealand and selected locations in Australia, Canada (for non-Canadian residents), Dubai, Hong Kong and Singapore.

Update: As of September 2012, this program is no longer offered in North America, or via Canadian mortgage brokers.

More on VFC Home Mortgages

VFC-Home-Mortgage VFC Home Inc. is open for business.

As noted in our prior stories, VFC will be targeting borrowers who don’t qualify through traditional lenders.  In addition, the company will lend only through mortgage brokers.

Below is a summary of what VFC does.


VFC’s Lending Guidelines:

  • Underwriting Process:  According to Anne Albani-Dolson, National Sales Director, VFC lends primarily “based on the credit profile of the client and the marketability of the property.” VFC uses five “keys” to classify borrower risk.  VFC says, “Once we determine the credit behaviors of the client we assign a Key, which determines the rate.”
  • Mortgage Types:  Purchases and refinances of owner-occupied or rental properties. VFC also offers BFS stated income mortgages.
  • Minimum Credit Score:  VFC says it “does not use Beacon scores when decisioning a deal.”
  • Max. LTV:  90% on both purchases and refinances
  • Interest Rates:  VFC’s rates seem reasonable for the higher risk they are taking and currently range from 6% on up.  The actual rate depends on which “Key” the borrowers falls into, the term, and the LTV.
  • Fees:  Instead of mortgage insurance, VFC offsets risk with a 1% to 3.5% Administration fee which is capitalized into the mortgage.
  • Max. Amortization:  30-35 years
  • Max. Debt Ratios:  VFC Home says it does not use GDS, only TDS ratios.
  • Lending Areas:  Ontario and BC for now. Other provinces will likely be added later.

Features Common to All VFC Home Mortgages:

  • Payment frequencies:  Monthly, semi-monthly, bi-weekly and weekly
  • Prepayments:  10% lump-sum prepayments annually plus a 10% payment increase allowance
  • Rate Holds:  60 days

VFC Home Inc.’s website will be ready in a couple of weeks according to the company.  In the meantime, VFC Home is currently available for broker submissions through Filogix Expert.  Agents can call 1-800-832-3321 for more information.

Scotia Re-Launches its Open Variable

Scotiabank-Mortgage Scotia has brought back its open variable mortgage.  It is priced at prime + 1%, matching the rates of RBC and TD.

Scotia’s open variable is available through mortgage planners starting today.  (We’re not aware of if/when it will be available through branches.  As of 11:00am ET, it was not yet added to Scotia’s retail website.)

The news will be welcomed by mortgage planners who have been patiently, or not so patiently, waiting for a competitively priced open product (that’s not a HELOC). 

It’s been slim pickins with opens since last fall when open variables got too pricey for some lenders to offer.

What’s New at Wells Fargo

Wells-Fargo-Canada Lots!

To begin with, Wells Fargo announced significant changes to its rate structure yesterday.  These include major rate decreases that make Wells’ products considerably more reasonable.  Loans over $300,000 have especially improved, with an additional 1.10% discount off Wells’ traditional rates.  Brokers can check all the latest rates here.

Secondly, Wells is planning major revisions to its broker compensation programs.  According to VP, Steve Malone, Wells is “currently analyzing approval rates, funding ratios and a number of other key metrics, to streamline our business and provide better service to our preferred brokers."

Wells says that “in today's lending environment, it's increasingly important to allocate resources to brokers that have a historically higher propensity of submitting deals that fit our criteria and actually close. It is extremely important to reward and strengthen & develop relationships with key partners that understand and support our business model."  [That’s a familiar tune.]

Third, Wells has some nice new product sheets on its website.  Check them out if you haven’t already.

Last but not least, there’s Wells Fargo’s new open mortgage.  Over the last year there’s been a dearth of new mortgage products in the non-prime market. It was therefore nice to see Wells Fargo come to market with this one.

A rundown on the new open product follows below.


About Wells Fargo

For those not familiar with Wells Fargo in Canada, they are one of the country’s biggest alternative lenders. In 2006, it shifted its focus from traditional subprime lending to lower-risk borrowers who just happen to be uninsurable for whatever reason.

Wells Fargo's primary market is now borrowers with problems documenting their income, and otherwise capable borrowers who simply can’t get financing with a conventional lender.  This includes self-employed borrowers with complicated income sources, people with temporarily high debt ratios, and borrowers with weak co-applicants, among others.

Wells Fargo tends to be a temporary lender due to its interest rate premiums.  The typical borrower stays with Wells for an average of 15-18 months.  Wells is basically a stop for people who need a year or two to build their finances and qualify with an “A” lender.

More Wells Fargo factoids:

  • For mortgages with co-borrowers Wells bases its lending decisions on the primary borrower (the applicant who makes the most money).
  • Wells’ interest rates are based on a “Credit matrix” that factors in a client’s credit, down payment, and other factors. Wells also charges a lender fee instead of mortgage insurance (Wells is a portfolio lender that self-insures).
  • Wells is the only lender left with both 100% financing and 40-year amortizations.
  • The income of 2nd applicants can be used, even with a poor credit score, because Wells doesn’t hold the 2nd applicant’s credit score against them.
  • Wells has no restrictions on lending area.  Wells will look at rural properties, as well as those in depressed areas.
  • Wells’ average deal size is roughly $170,000.


Wells Open Mortgage

Wells’ new open mortgage is designed specifically for people whose life events leave them in a situation where they need temporary financing (to repair bruised credit for example).

Steve Malone, Vice President Wells Fargo Home Plan Mortgage, says, “Its ‘open’ feature allows customers to stay with us as long as it takes to rebuild or enhance their personal situation to where they can be placed in a conventional mortgage.”

For pricing, Wells' charges a ½% premium over base rates for its open term. While that premium is very reasonable, the base rate currently starts at 7-8% depending on loan size. So, this is clearly an option meant for difficult-to-qualify applicants who need short-term financing.

The open mortgage is available in 3-year or 5-year terms and applies to purchases, refinances, and business-for-self ( BFS ) applications. As noted above, the maximum loan-to-value is 100% (Note: you need a 640 credit score for 100% financing). Maximum amortization is 40 years. 

As with all alternative lenders, the value of the property (i.e. appraisal) is heavily factored into approvals.

If you require more information on this or any of Wells Fargo's mortgage products, any mortgage planner should be able to help.

National Bank All-in-One – Mortgage of the Year

National-Bank Thanks to the credit crisis, lenders cut more products in 2008 than they launched.  But one lender stood out, unveiling what would become the year’s best new mortgage. 

In April 2008, National Bank re-launched its All-in-One mortgage/HELOC.  The new version fixed some nagging problems with the old All-in-One and made it the product to beat.

The All-in-One is now the only mortgage/HELOC in Canada with each of the following:

  • A line of credit that is linked to your mortgage
  • Interest cancellation (Positive chequing/savings balances offset your line of credit balance to save interest)
  • An immediate and automatic increase in your available credit line as you pay down your mortgage
  • The ability to choose multiple terms and rates for interest rate diversification (e.g.  a 5-year variable, a 5-year fixed, and an open HELOC—all in the same mortgage.)
  • Optional interest-only payments
  • Up to 99 line of credit sub-accounts (for segregating borrowing to track interest and balances separately)
  • Chequing privileges in each sub-account
  • A consolidated monthly banking/mortgage statement with online access and free online banking

In sum, we wish to congratulate National Bank for an excellent overall product—and the 2nd annual CMT Mortgage of the Year. 

Hopefully more lenders will be inspired to offer innovative products of their own in 2009.


For more information…

News From CAAMP 2008

CAAMP-Expo-2008 Canada’s biggest mortgage convention has drawn to a close.  This year’s Canadian Mortgage Conference and Expo was as informative and professionally run as ever.

The show featured a variety of events including:

  • Stimulating speakers (Deepak Chopra, Ben Stein, etc.)
  • Mortgage industry discussions (Two industry panels plus Benjamin Tal)
  • The usual fun stuff (CAAMPFEST, luncheons, and lender parties)

The industry discussions were especially worthwhile.  Mortgage-specific sessions were rather lacking at last year’s show so this year’s lender and broker panels were a nice addition.  (We’ll cover these panels in separate articles later this week.)

On the Expo floor there were 86 lenders and mortgage services companies displaying their products.  Below is a sampling of the new products and services we heard about…

  • Abode Mortgage:  Launching a new construction draw mortgage “sometime next year.”
  • CMHC:  Added a new website where brokers can customize CMHC materials for distribution to consumers.
  • CAAMP:  Introducing a new AMP designation for brokers who have been in the industry less than the normally required two years.  It’s called “AMP Candidate.”
  • Equitable Trust:  Expanding their lending area to BC within the next six months.
  • Filogix:  Launching Exchange 2.0 in spring 2009.  Essentially, Exchange 2.0 will provide brokers with an improved alternative to faxing documents to lenders. It’s designed to be a “paperless” system that minimizes broker and lender follow-up and document confirmation.
  • FSCO:  Among other things, FSCO’s new “suitability” rule will take effect in Ontario on January 1, 2009. (More on this in a future story)
  • Macquarie Financial:  Unveiling a new 1-year convertible mortgage, possibly in a “month or two.”  Also introducing a new variable-rate mortgage offering later this month.
  • Marlborough Sterling:  Demonstrated the recently released MorWEB 2.0 and announced the addition of ING as a compatible lender.
  • National Bank:  Supposedly working on a new 3-year variable-rate mortgage for release “in 2009.”
  • VFC Home:  VFC is a new “near-prime” lender that is launching 3 and 5-year fixed-rate mortgages in January.  Rates will be predicated on a “5-tier” system that is not based on credit score.  90% is the maximum LTV. VFC will not offer a variable-rate product for now, but will finance purchases, refinances, BFS stated income deals, and rental properties.  The company is currently completing work on its Filogix connectivity.
  • Wells Fargo:  Recently launched open fixed-rate mortgages with 3-year or 5-year terms.  These products are priced at a 1/2% premium to Wells Fargo’s normal rates.

If you thought this year’s Expo was fun, you’ll be able to do it all over again next year.  CAAMP 2009 will take place on November 22-24, 2009 at the Metro Toronto Convention Centre.

New Conventional Products from Xceed

Xceed It’s always nice to see lenders launching new products–especially in a tough credit market.  Xceed Mortgage announced a launch of its own a few days ago, with the unveiling of its new line of conventional mortgages. 

Three new products were released.  All three have 5-year fixed rates that are based on the applicant’s risk profile (i.e.  the borrowers selected amortization, Beacon, credit matrix parameters, etc.).

Prime Ultra Fixed

  • Maximum LTV:  80%
  • Minimum Beacon:  580
  • Compatible with:
      • Self-employed applicants (with 620 Beacons and 75% LTV [with minimal documentation] OR 80% LTV [with full documentation])
      • New immigrants
      • Borrowers with past bankruptcies
      • 2nd homes
      • Regular purchases and refinances

Prime PLUS Fixed

  • Maximum LTV:  80%
  • Minimum Beacon:  580
  • Compatible with:
      • 1-4 unit rental properties (with 600 Beacons, 80% max. LTV, using 80% rental offset)
      • Self-employed applicants who can fully prove income (80% LTV & 600 Beacons)
      • New immigrants
      • Borrowers with past bankruptcies
      • 2nd homes
      • Regular purchases and refinances

Prime Fixed

  • Maximum LTV:  60%
  • Minimum Beacon:  580 (No minimum for owner-occupied fully qualifying purchases or refi’s. Contact Xceed for more info.)
  • Compatible with:
      • Rental properties (with 600 Beacons, 60% max. LTV, and using 80% rental offset)
      • Self-employed applicants who can fully prove income (60% LTV & 580 Beacon)
      • 2nd homes (60% max. LTV)
      • Regular purchases and refinances


Since Xceed pulled out of the subprime market in March, the company has primarily been limited to selling regular high-ratio insured mortgages.  These new mortgages give Xceed a nice product boost.

VP of Marketing & Sales, Colleen Adams, says: “Our goal is to foster relationships with a select group of brokers.” The company will do that by focusing on a smaller pool of brokers who commit to higher volumes and funding ratios.  (This is a small trend we’re seeing nowadays)

Adams continues:  “Our (new) conventional product offers rates dependent on the amortization the consumer chooses for their mortgage.  With reduced amortization risk, we offer the consumer a lower interest rate…”

As for specific niches targeted by these products, Adams highlighted the following:

  • “We will finance up $1.5 million on purchases or refinances, without a sliding scale.”
  • “On top of our standard 80% rental offset for rental properties we will also take into consideration a 50% rental offset on fully contained basement units.”
  • “Another key area of focus for us is the new entrants to Canada (market); as we feel this is an untapped market with great potential.”

VFC Home

There's a new lender coming to town:  VFC Home Inc.

Details are sketchy at the moment but we do know that VFC Home will distribute its mortgages through the broker channel.  Word is, they will offer "near prime" products and launch in January, but we can't confirm either just yet.

VFC Home's parent, VFC Inc., was founded in 1994.  It operates nationwide as a subsidiary of TD Bank.  The company's business presently centers around consumer lending and automotive finance.

We don't have much more information on VFC at the moment.  We hear they're unveiling their products officially next week at the CAAMP Expo in Vancouver so we'll report back then.


As a side note, the company has recently been advertising a variety of job openings.  Here is one recent opening for an underwriter position.