Believe it or not, everyone doesn’t get the same rate on their mortgage. In fact, The Bank of Canada confirms it: “those who shop around really do get better deals on mortgage rates.”
The report Discounting in Mortgage Markets looked at insured Canadian mortgages from the mid 1990s to 2004 and found the difference between the discount rates customers received was always increasing.
Most importantly, the report found that consumers who compared mortgage rates and asked questions were rewarded with savings.
Consumers who compared mortgage rates and asked questions were rewarded with savings.
With this big gap in mortgage rates, the authors of the report estimated that a buyer who got a mortgage at the higher end of the discount rate versus someone on the lower end would pay more than $9,000 on the life of an average mortgage.
Interestingly, the study’s authors found the bank’s posted rates were almost always the same. It was behind the scenes where the bank managers were offering people who asked — or their brokers — better deals.
Today, banks and brokers want your business, and your loan, and because of that you are in a position of power. Comparing rates online, and researching the market gives you the power to get the best rate.
If you have a troubled financial past or a poor credit rating, you may feel you don’t have the right to push for a great rate. When you work with a broker or move to another bank for a mortgage, you have to gather a lot of financial records, which might seem discouraging, but taking the time to show them your records can save you thousands of dollars in interest.
Remember, do not settle for a rate unless you know if it is the best one you can get!