Looking for the best/lowest mortgage rates? How do you compare between the banks in Canada? In this episode, we discuss what the rate differences are between the banks, how to find the best rates, best time to shop and the effect of the new mortgage rules.
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Hi everyone, welcome to another edition of Homebuyer's School.
Today I'm joined by Mujtaba Syed, Manager Mobile Mortgage Specialist with TD Canada Trust. Today the question we're going to answer is [00:00:30]:
What are the differences in mortgage rates between banks?
So every bank has what they like to call their discounted, off their posted rate, and most of the time it is done to attract new business and new clients.
Most banks we find are technically in line.
There might be a slight difference in rates, a little bit better, a little bit higher. Really depends on what the bank is trying to do at that time, just to raise capital and to attract clients.
So how would I go about finding the best mortgage rates between the banks?
Yeah, absolutely [00:01:00]. I think the best thing to do is to definitely shop around.
With technology these days, you can go on internet, do a quick search and see what the best rates in Canada are.
Every bank technically has their posted rates posted on their website.
It's a good idea to maybe book before with your booking appointment is to go online and see what rates are offered by that certain bank.
Or if you feel like another bank has a better rate, sometimes banks are actually matched through competition, [00:01:30] so it's a good idea to know what the competition is before talking to your bank, as well.
When is the best time to look for the best mortgage rates?
Is it a specific time of year, or is it all year-round, just depending on which banks provide the lowest rates?
So in my opinion, mortgage rates are very seasonal.
So we do feel ... mortgage rates are technically a little bit higher around November to about January/ [00:02:00] February, which is the winter months.
Real estate market kind of slows down, purchases slow down, house-buying activity slows down, and then we actually see a little bit the market pick up around spring time, which we call the spring market.
Rates technically do tend to come down a little bit lower at that time, just to encourage people to get into the market and purchase a little bit more.
With the new mortgage rules in Canada, and you can watch our video for the link above, how does that impact [00:02:30] the difference in rates between the banks?
So the stress test technically has nothing to do with interest rates currently where they're posted.
Interest rates are going to be determined a lot of different factors.
It can be determined where the economy is, if the economy is doing better, it's going to be a little bit higher. If the economy is doing not so well, the rate could be a little bit lower.
The stress test is just for qualifying purposes, to see exactly how much you qualify for a mortgage.
Once you qualify for the mortgage, you can get technically any rate that you [00:03:00] want, and at that time it's best to shop around to see what rates are offered by different banks.
Different banks have different rates based on whatever discount they're willing to provide or wanting to provide to get your business.
Karl Yeh: So, Mo, do you have anything else to add?
Yeah, I would say definitely the best thing to do is speak with your lender.
Speak with your bank mortgage specialist and see what's best for you, what kind of rates are best for you and just definitely shop around, try to get yourself the best rates.
Go online and shop your bank or your specialist [00:03:30] with their competition to see if there is a better rate out there for you.
Perfect. Well thank you very much, Mo. Thank you very much everyone for joining us. Remember to watch our videos on the new mortgage rules in Canada.
Have a good day.
Let us know if you have additional mortgage questions or home buying questions that we can answer by submitting them in the comments section below.
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About Mujtaba Syed:
Mujtaba is an experienced mobile mortgage specialist with a demonstrated history of working in the banking industry. Skilled in Negotiation, Commercial Lending, Banking, Sales, and Credit Analysis. Strong product management professional.