Across the country, there is one question that all homebuyers have: “How can I find the best rate for my mortgage?”. Some people spend hours researching into this, while others turn to professionals for advice. For a first time buyer especially, it is very important to secure a mortgage that is affordable and reasonable. So luckily the answer to the question is very simple!
So, how do you get the best possible mortgage rate? The answer is: do not go to a bank for your mortgage product. Contrary to popular opinion, a bank may not be able to get the best mortgage rate for you. Yes, they may have been recommended by others and you may feel comfortable dealing with an institution that you already have an established relationship with, but there is much more to it than that.
While your bank can offer you the comfort of a familiar face and the ease of having all of your financial products in one place, Bank of Canada research shows that clients who purchase their mortgage product through a mortgage broker pay less than those who deal directly with lenders.
The reasons that banks often offer less competitive rates are:
- Banks are extremely slow at passing on Bank of Canada rate decreases onto their customers due to the nature of the corporation.
- Banks bought out many trust companies during the 1990s which allowed them to monopolize the mortgage market which previously offered many discounted mortgage rates.
- Banks do not have access to a variety of lenders, while a mortgage broker does.
It’s clear to see why you may be much better off turning to a mortgage broker to find the best possible mortgage rate for you.