There are many websites that will show you mortgage interest rates from several different lenders, but why do these interest rates differ lender to lender? What does it mean to you, the mortgage consumer?
Every lender has their own products which they offer at a certain interest rate. However, the lenders only ever publish their lowest rate, that doesn't mean it is a rate that apply's to all borrowers. Basically, the two primary rates that people see online are the Posted rates, and the discounted rates.
Posted rates are the rates that the lenders officially publicize and announce as their basic rate. These posted rates will differ lender to lender for many reasons and it can be confusing to sort through all of the information. Essentially these are the standard starting offer borrowers will be given, so unless you are a good negotiator, you will likely be offered these rates when you go to your local branch. Regardless of loyalty, regardless of you being an A+ borrower, the posted rate is the starting point for all negotiations.
A discounted rate is as it sounds, it is the discounted offers from the lenders. These discounted rates are applicable to very specific mortgage types and borrowers. However, accepting this discounted rate might mean that you making sacrifices to get that bottom barrel interest rate.
With discounted rates, there can be strings attached, you could be sacrificing mortgage options (such as porting, pre-payment options, etc), or you could be increasing your pre-payment penalty should you need to cancel your mortgage prior to the term completion.
Another thing to be aware of, is that the rate being advertised for a lender's 5yr fixed mortgage (most common mortgage type), does not apply to all borrowers and thus you may not qualify. Typically, the rates posted are for the "High Ratio" borrower (borrowers with 5% down payment) which means a large portion of borrowers cannot get that rate and thus feel frustrated and cheated when they try to navigate the mortgage application process on their own as they feel deceived or mislead.
To find the best interest rate for you, you need to rely on a mortgage professional to make certain you are getting a great rate and the proper mortgage agreement and features for your current and future needs and goals. Mortgage agents do the shopping and negotiating for their clients saving them not only money, but time and frustration!
Call me today to discuss all of your options.
Meghan Van Houten - Mortgage Agent
416-709-9062 | 1-877-366-3487
Independently owned and operated
202-120 Traders Blvd. E., Mississauga ON L4Z 2H7