Where to Find the Best Mortgage Rates In Canada...
Are you looking for the best mortgage rates in Canada? No problem, they are easy to find... but first, did you determine what is best for you? Visit Best Home Equity Loan Rates.
There are only a couple of places that you can look for the best mortgage rates in Canada.
- your local bank branch, or it's internet site
- your online bank
- your local mortgage broker, or his/her website
A number of years ago, a friend of mine, James, was going to purchase his first home. His parents told him to go to their bank and apply for the mortgage. He called the bank and booked an appointment for a few days later.
A few days after he met the banker he was informed that he was approved. He asked what rate he had received and the banker told him the rate. (I can't remember the exact rate at that time) The banker also advised him that he had received a very good deal because his parents had referred him to their bank.
A couple of weeks later, while he was still shopping for house, he bumped into some friends who had just purchased their home. They were excited about the process and explained their good and bad experiences while house shopping.
They mentioned the mortgage rate that they had received and he couldn't believe how much lower it was than the rate that he was given.
He clarified the term and whether their rate was fixed or variable. He also confirmed that their rate was closed and not open... He soon realized that he didn't recieve one of the best mortgage rates in Canada!
What happened? He thought his banker had given him a great deal!
The banker had actually given him a small discount off the posted rate. Because James didn't have much other business with the bank, the loans rep didn't give him the lowest rate she could. She gave him a slightly better deal than posted only because his parents had some accounts there.
He started to make some calls to other banks in his area. He found that they all offered different rates to him over the phone. Some wanted have him in to complete an application first. Others would give him a rate over the phone, without even asking him any questions about his situation, needs, etc....
For a local bank branch: The Best Rate is Based on the Bank - Client Relationship, or Potential Relationship!
He found out that most banks will offer rates based on the business that the client brings, or has, with the bank.
The rates quoted by the local branches were very inconsistent. Some were quoting posted rates, others quoted discounted rated...
Rarely do clients receive the best rates when they drop into their local bank branch looking for a mortgage.
He then started doing some research online. Virtual banks, i.e. those banks that don't have local branch representation, had better rates that most of the local bank branches that he spoke with over the phone.
Like the local banks, some gave him information about his rate right away, others wanted him to complete an application before they could offer him a specific interest rate.
He ended up speaking with one virtual bank representative who was very helpful. He decided to apply with this virtual bank, just because of the service he received from the rep on the phone.
Once approved, the interest rate was much better than the one he orginally received from his parent's banker! Perhaps he is getting closer to the best mortgage rates in Canada?
Online/Virtual Banks will often offer better rates than Local Bank Branches
A few weeks later, he had some questions about the process and called his virtual bank. The rep he was dealing with wasn't in that day, so he spoke with someone else...
This new person, wasn't very professional and didn't know what he needed and asked him to wait until the original rep returned to work in 3 days.
This was a little inconvenient! He wanted the answer and it was frustrating that he couldn't just speak with the person who did such a great job for him in the first place.
He went on a search again for the answers he needed. This time he was referred to a mortgage broker that his realtor works with.
He called the Calgary Mortgage Broker and explained his situation. The broker asked him some questions about his financing, who he was dealing with, etc..
The mortgage broker explained and clarified all the questions that he had. The broker also explained how to find the best mortgage rates in Canada.
He confirmed much of what he had already learned. Local Bank Branches can offer good mortgage rates, but rarely offer client's the best rates. Virtual banks almost always offer better rates than the local branches because they don't have the huge costs associated with the local branch network.
Mortgage Brokers will often deal with more lenders. Many of the lenders that the mortgage broker deals with don't have a local branch network, they don't have a sales force that try to acquire new clients. Some of the lenders that brokers deal with offer better rates to the broker's clients than are available elsewhere!
The mortgage broker explained that the rates offered to brokers are often directly related the the volume of referrals. The rates are also related to the quality of referrals that the mortgage broker, i.e. the percentage of referrals that follow through.
A Mortgage Broker can often get better rates based on their relationship with their lenders
Not all mortgage brokers offer the same rates with the same lenders. Some brokers can slightly lower rates with some lenders because of the relationship that has been established, the volume of referrals and the quality of referrals!
Some Broker Lenders will also have un-published specials and rate deals for clients referred for various reasons!
James decided to complete a Quick Application with the mortgage broker as well. He received an even better rate. He also realized that a 4 year term would be better for him than the 5 year term that everyone else had recommended. He is 1 year into a 5 year employment contract and might have to move at the end of this contract.
A 4 year term could save him thousands of dollars in interest penalties if he had to sell before the mortgage matured!
James liked this mortgage broker. He was helpful, knowledgable, professional and found James one of the best mortgage rates in Canada that fit with James' individual needs!
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