Mortgage-Matters

Mortgage rate shopping

The most frequent question that I hear from potential clients is – “What is your best rate?” and why wouldn’t you ask that question? The media is flooded with articles about how to shop for the best mortgage rate and rate sites are popping up all over the internet. That must be the most important question to ask when you are shopping for a mortgage. Right?

The worst kept secret? It’s really easy to get a low interest rate on your mortgage. All you have to do is make a couple of calls for rate quotes then pit your mortgage broker against your bank or vice versa and one of them is going to beat the other on rate. Excellent!

So back to your question – “What is your best rate?” Now you make think that this is an easy question for a mortgage broker to answer, but it’s really very complicated. You want me to just tell you what my best rate is for a certain term of mortgage. But I’m conflicted and I don’t really want to answer that question directly because I want you to understand that you aren’t asking the right question.

Understanding that the interest rate is only one small part of your mortgage’s terms and conditions is important. If you take a look at your mortgage documents, the interest rate is only mentioned once on the very first page. Have you ever wondered what’s in those other 25 pages?

There are dozens of mortgage lenders in Canada – mortgage companies, banks, credit unions, trust companies, etc. And there are many differences within their mortgage documents that lay out the terms and conditions of your mortgage, such as prepayment options and the penalties for breaking your mortgage early, portability and assumption options, and even renewal terms. But you know what? There is very little difference in their rates.

What could be in the fine print? Perhaps the mortgage is closed for the five-year term. 100% closed. That’s the trade-off for an extremely low rate. You can only break your mortgage if there is a bona-fide sale of your home so that means there is no way to access any equity in your home during the term of the mortgage.

Some of these low-rate mortgages are “no-frills” mortgages which means they are packed with many restrictive conditions and potential landmines. If you commit to one of these products without reading all of the fine print, which most often happens, you could find yourself in a situation that you may find difficult in the near future, meaning sometime in the next three years given that six out of 10 Canadian mortgage holders break their mortgage at about the 38-month mark.

There is no denying that rate is important but what is the right question that you should really be asking? “What is the best mortgage available that is going to meet both my short-term and long-term goals?” And, yes, it should have a competitive interest rate. Ensure that you read and understand all of the fine print in your mortgage’s terms and conditions. 

Give me a call at 1-888-561-2683 and we will discuss rate at some point in our conversation but ensuring that you understand all of the terms and conditions of your mortgage contract is really more important to me as your mortgage broker.



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About the Author

April Dunn is the owner and a Mortgage Broker with The Red Door Mortgage Group – Mortgage Architects. She has been assisting clients to purchase, refinance or renew their mortgages for over 20 years.

April has experience as a Credit Union manager, a Residential Mortgage Manager with a large financial institution and as a licensed Mortgage Broker. By specializing in Strategic Mortgage Planning she has the tools available to build a customized mortgage plan, with the features and options that meet your needs.

April provides a full range of residential and commercial mortgage financing options for clients all over the province of British Columbia and across Canada through the Mortgage Architects network.

Contact e-mail address: [email protected] or by phone at: 888-561-2679.

Website:  www.reddoormortgage.com



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The views expressed are strictly those of the author and not necessarily those of Castanet. Castanet does not warrant the contents.

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