Robert McLister, a mortgage rate expert, highlights a key financial tip that lenders prefer borrowers overlook: always compare mortgage rates. In a recent analysis of the Canada Mortgage and Housing Corporation's (CMHC) new Mortgage Consumer Survey, two figures stood out: 88% of borrowers compare interest rates, but only 33% use rate comparison websites. This gap suggests many are leaving money on the table.
The Cost of Not Shopping Around
For the 12% who skip rate comparisons, lenders rejoice. Not shopping around can cost borrowers approximately $1,431 per $300,000 borrowed for every 10 basis points above the best rate over a standard five-year term. This is essentially a thank-you cheque to the lender. While some borrowers have valid reasons—small principal, short remaining term, product loyalty, or inability to qualify elsewhere—most with a real balance should invest the effort to compare.
Rate Comparison Sites Are Underutilized
The survey found that only one in three borrowers uses rate comparison sites, a decline from 38% the previous year. This is puzzling, especially for prime borrowers who have every reason to shop. Despite the dominance of online mortgage searches in Canada, many still rely on less efficient methods. Robert suggests the actual number may be higher, but even so, more Canadians should leverage these tools.
Two Ways to Find the True Rate Market
To know the real rate market, you have two options: ask a knowledgeable person or check the internet. If asking someone, ensure they are well-informed and honest. Many mortgage brokers monitor rates closely and can provide accurate comparisons. However, asking a lender that only sells its own brand is like asking a chef if their restaurant is the best—unreliable. The exception is if that lender happens to offer the best rate at that moment, but the odds are low (about 1 in 50).
Online Resources to Use
When using the internet, choose the right sites. Rate comparison pages like Wowa, Ratehub, or Financial Post's daily updated mortgage rates are reliable. You can also explore forums like Reddit or RedFlagDeals, browse broker websites, scroll social media, or query AI chatbots—which 16% of mortgage shoppers now use, according to CMHC.
In conclusion, haggling over your mortgage rate still works if you put in the effort. Don't let lenders benefit from your inaction. Compare rates thoroughly to ensure you get the best deal possible.
