How to push for the lowest mortgage rates in a high interest rate world

The highly anticipated interest rate cuts so many have been banking on this year keep getting pushed back, while borrowers lost an aggressive rate advertiser after HSBC Canada was taken over by RBC .

“They didn’t negotiate with the customer a better rate off the posted rate, whereas all the other banks, including ourselves, we put a posted rate out there, and then we negotiate with the customer off that rate,” McKay said in an interview. Knowing what some of the best options are allows you to either go with what you’ve already found, or go to a bank or other competitor to see if they’ll match.It can be worth it, since knocking a few points off a mortgage can add up. Every 0.1 percentage point per $100,000 mortgage translates to roughly $480 of interest savings over five years on a 25-year amortization, he said.

In the low-interest rate years after the global financial crisis, Canadian banks also increased how much interest they added to the Bank of Canada rate to create their prime rate, from 1.5 per cent to two per cent, she noted. Some lenders have mandatory default insurance, or will only hold a rate for a limited time, or have high fees if you want to break the mortgage early.

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