Posted by: MonsterMortgage.ca
Troubles in Alberta had earnings experts worried that exposure to struggling energy companies and distressed home-owners might cool the profits of Canada’s behemoth-sized banks.
Although interest rates remain at historically low levels, Canada’s largest banks continue to generate boat loads of profits each and every quarter. To the tune of billions, the banks make money off investment banking, capital markets activities, account fees, and especially – interest from mortgages.
Informed Canadians might be quick to point out that although the Bank of Canada has lowered the overnight lending rate twice, by 0.50% – Canada’s biggest banks have only lowered their prime rates by 0.30%. When traditionally, the banks would pass on the entire rate cut by the Bank of Canada – they’ve now decided to change the landscape, and put the 0.20% difference in their pocket, not yours.
Without question, the mortgage revenues from Canadian home-owners still remains a cash cow for Canada’s big banks.
Here are each individual bank’s profits for the second quarter:
- $2.57 billion for RBC
- $2.05 billion for TD
- $1.8 billion for BNS
- $973 million for BMO
- $941 million for CIBC
Honestly; we know that these banks contribute to the Canadian economy – of course that is the case. Yet, when it comes to providing the best mortgage products, Canada’s largest banks often provide a product that is largely fueled by huge advertising budgets and the trust Canadians attribute to their banks.
The mortgage products offered by Canada’s largest banks continue to employ ‘posted rates‘. Posted rates are akin to the ‘Suggested Retail Price’ of goods – the price that you know they advertise, but that no one should ever pay.
Collateral mortgages also continue to catch home-owners off guard. Collateral mortgages limit the options of home-owners upon their mortgage renewal time – making it costly to switch lenders to a better mortgage rate. These ‘surprises’ are often a costly piece of bad news to home-owners that they may or may not have accounted for.
Don’t believe us? Well just take a look at the numbers.
Looking to beat the banks? Talk to a MonsterMortgage.ca Mortgage Expert today by filling out the form above, and put more money in your pocket – not your bank’s.