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The Only Way to Win the “Low Rate” Game Is Not to Play…

July 26, 2017

Many Canadians find themselves getting caught up by the “low rate game”


Although the Internet is a fantastic tool for your mortgage research, many home owners find themselves being lured by the absolute lowest mortgage rates that they can find. The prices of homes and transactional costs of buying are high enough as is, so many Canadians think, “if I can get the lowest interest rate from my bank, I’ll be able to afford a higher mortgage amount or pay off my mortgage sooner….” Unfortunately, prospective home owners who are lured by the big banks’ multi-million dollar marketing campaigns often lose out on the best mortgage products available to them.


The ‘special offer’ you get in the mail will never be the best rate, will never have the best terms and will never be the best product available to you. MonsterMortgage.ca has previously discussed in great detail the pitfalls of the fine print in your bank’s mortgage offer – these are conditions that can seem small, but come with big costs down the line. With a bit of knowledge, you’ll soon know what you need to beat the banks.


A mortgage is much more than just a low fixed or variable mortgage rate. In most cases, the lowest mortgage rate almost always comes short of the necessary features and flexibility you need to make sure you can pay down your mortgage faster.


The old adage “you get what you pay for” applies to your mortgage as well.


Here’s what to look out for when it comes to the ‘lowest rate’:

Pre-Payment Privileges

The pre-payment options on your mortgage allow you to pay amounts over and above your regular monthly payment. These pre-payment options are the key to paying down your mortgage even faster – shaving years off of your mortgage and keeping tens of thousands of dollars of interest in your pocket, not your bank’s. Pre-payment options typically include double-up payments, lump-sum payments and the ability to increase your regular monthly payment by as much as 20%. A savvy mortgage broker can show you the math behind increasing your payments. One MonsterMortgage.ca client has trimmed $60,000 in interest of their mortgage using some of these strategies.


Collateral Charge

Conveniently forgotten by many a banker(check out this CBC Marketplace video), the collateral charge catches many unsuspecting Canadians off guard when it comes to breaking their mortgage; maybe because they’re looking to move or to take their mortgage elsewhere. The bank’s collateral charge requires you, the borrower, to incur legal fees in order to break the mortgage when you typically wouldn’t have to. The fees behind the collateral charge often make it no longer worth it to go somewhere else for a better mortgage.


Expertise & Service

Often disregarded as secondary to rate, the service you receive from the lowest rate product might not be up to your expectations. Just as you don’t expect premium service from a discount retailer, your cheapest-rate service representative might be more worried about the next deal, just when you need them most.


If you have questions regarding your bank’s “special offer” or regarding that crazy low rate you’ve seen online, fill out the form above and speak to a MonsterMortgage.ca Mortgage Expert today.