Banks are funny.  They quote mortgage rates that they never expect most people to pay.  They call them “posted rates.”

Banks are far from dumb, however.  They quote posted rates because their analysis suggests it’s the most profitable strategy.

There are different reasons why.  To begin with, banks want to avoid the price wars that would ensue if they started widely quoting discounted rates.  This would rock their profitability and significantly accelerate the commoditization of mortgages in Canada.

Secondly, banks know they have the edge versus the customer in negotiating rates.  Bank reps are far more prepared for battle then the average mortgage shopper, mostly because of all the training banks give them.

Last but not least, big banks know that many people will just blindly renew with them or accept their initial quotes.  Openly quoting deep discounted rates would drastically slash banks’ profit margins with these customers.

In general, it’s true that if you want the best bank deal you have to negotiate…hard.

If you want the best deal period, use a professional mortgage planner.  You’ll find the process much more pleasurable (and economically beneficial) because success no longer depends on your negotiating tactics.  Negotiating becomes the planner’s job, on your behalf.