The Best Mortgage Rate for You
The Mortgage Centre’s rate page has a very sage title:
“Is it the best rate, or the best rate for you?”
Its point being: A lot of websites claim to have the best rates, but there’s always more to the story.
For one thing, probably 95% of “best rate” claims are false. More importantly, as the Mortgage Centre rightly suggests, the lowest rate is not necessarily the best rate for you.
Unless you know who the quoted lender is, and know that lender’s criteria for credit score, debt ratio, property type, loan-to-value, income, etc., there’s no way to tell on your own if you meet its standards. (Albeit, someone proving $100,000 income the past few years, putting down 20% on a marketable home, with a 35% TDS, and a 720 beacon score, can feel confident about qualifying at most lenders [just as an example]).
Back to the point, there are lots of qualification hoops to jump through with some lenders—especially the lowest cost lenders.
Moreover, there are various economic dangers strewn about the fine print of many mortgages. Examples include:
- Zero prepayment privileges
- 12-month interest penalties
- IRD penalties based on bond yields
- Fully-closed terms (no way out until maturity)
- Ultra-short rate-hold periods
- No pre-approvals
- No portability
Other annoyances:
- Horrible post-closing service
- Slow approval times
- No online access
- Unexpected fees
It is the job of mortgage planners to filter the plethora of mortgages and present the best overall value to you. When determining overall value, rate is the #1 criteria, but only after a mortgage is determined to be suitable.
There’s no downside to good advice, so get as much of it as you can. As Canadian Mortgage Professional magazine very wisely wrote: “Homebuyers who ask mortgage professionals 'What is your best rate?' are not going to be well served by a mortgage professional that simply responds with a number.”
