Mortgage rates
The number everyone asks about first, and the one that matters least on its own. Here is what to compare alongside it.
Posted rates against broker rates
Posted rates are the sticker price. They exist so there is something to discount from, and they are also what most penalties get calculated against. Broker rates change often and depend on your file, so ask Chad for today's rates.
Some conditions may apply. Rates may vary from province to province and are subject to change without notice. Posted rates may be high-ratio and/or quick-close, which can differ from conventional rates. O.A.C. E.&O.E.
What actually decides your rate
Nobody is quoted the rate on a table. The figure you are offered comes out of a handful of specific things about your file, and most of them are things you can influence.
Whether the mortgage is insured. Counter-intuitively, an insured mortgage with less than 20% down often carries a lower rate than an uninsured one, because the lender's risk is covered. Putting exactly 20% down sometimes costs you a better rate than putting 19% down would have.
The property and its use. Owner-occupied gets the best pricing. A rental is priced higher. A property over a certain value, in a small market, or on a large acreage narrows the lender list, and a narrower list means less competition for your business.
Your credit and your income type. Not just the score, but how the income is documented. A salaried employee with a two-year history is the cheapest file in the country. A self-employed applicant with strong deposits but heavy write-offs may be a better credit risk in reality and still be priced higher, because the documentation is what gets underwritten.
The term and the product. Shorter terms and restricted products price lower. A restricted or no-frills mortgage can look excellent on a rate sheet and then cost thousands if you need to break or refinance it, because the exit terms are where the lender makes the difference back.
Compare the penalty, not just the rate
On a fixed mortgage, ask how the interest rate differential is calculated and against which rate. Some lenders use the posted rate rather than the one you were given, which can multiply the charge several times over.
Check the prepayment privileges
How much can you put down annually without penalty, and can you increase the payment? On a mortgage you intend to pay off early, this is worth more than a small rate difference.
Ask whether it is portable
If you may move mid-term, a portable mortgage lets you carry the rate and avoid a penalty. A restricted product usually will not port, and that becomes expensive at exactly the wrong moment.
Get a real number for your file
A table cannot price your situation. Fifteen minutes and a few documents can.
Rates change without notice. Nothing on this page is a rate offer.