Broker Beats Bank

I’ve wanted for a while to publish a chart highlighting the rate differences between Canada’s different mortgage lenders to show the vast spread between their pricing at any given time. I found this a difficult task because most lenders don’t advertise their prices openly or accurately. Lost somewhere in the posted rates, discounted promotions, and bait and switch quoting of insured mortgage pricing, lay the truth: If you’re not looking at more than one lender, you’re probably getting ripped off.

To mitigate a lack of quality and reliable data, I was forced to collect what data was available to my brokerage over time to deliver a meaningful comparison between the lending institutions. Fast forward 2 years and we are finally here. To construct a fair comparison and in the interest of simplicity I used the pricing of 5 year fixed rate uninsured residential mortgages with “full” privileges. Many mortgage rates are quoted as insured, or with prohibitions on activities such as the ability to break the mortgage. Below is a table that shows the rates that were available to mortgage brokers between January 2014 and the end of October 2015. The ‘Savings’ column hammers out a salient point: There is almost always a better place to go than your bank when it comes to rates.

5 Year Fixed Rates for Uninsured Residential Mortgages

In case you’re a graphical person, the blue line below represents the savings of the best rate over the best bank, and the group of trend lines above indicates the pricing of a few banks and the best rate which had a downward trend from January 2014 to October 2015.

As of today, November 14, 2015 our best rate is 0.25% cheaper than the best bank rate. This will save you $250 per $100,000 of your mortgage per year. For a $350,000 mortgage that is savings of $875 every year. Why would you pay more?

As always, call me any time to find the best products and rates for your financing.

David Steinfeld, Mortgage Agent 416-371-2077

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