Announcing The Winner of Our Financial Literacy Scholarship (Spring 2022)
We are awarding $750 to a student every semester. All you have to do is show us how financial literacy has made a difference in your life.
Homes in and around the Greater Toronto Area may come with some hefty price tags, but if you’re property shopping in Canada’s largest housing market, you’ve got one thing working in your favour: cheaper mortgage rates versus the rest of the country.
Whether you look at Ontario’s mortgage rates or Quebecs, the insured 5-year fixed mortgage rate will differ from province to province due to different economic variables.
If you’re a borrower outside of Ontario, you may be paying a material premium for a similar mortgage. Given a difference of around 15 basis points, you’re spending up to $650 more per $100,000 of mortgage over five years.
It seems unfair to have to pay more simply based on which province you’re in. But the difference isn’t so much about geographical discrimination as it is about supply and demand.
Since Ontario is such a large competitive mortgage market, borrowers there have more options to choose from in terms of financial institutions.
From the Big Six banks, like RBC and Scotiabank, to monoline lenders like First National, MCAP and CMLS, to the more than 70 independent credit unions that operate solely in Ontario, options abound for borrowers in Canada’s most populous province. And because these lenders are all fighting for the same mortgage dollars, the market is fiercely competitive.
Some of the lowest cost lenders, such as Meridian Credit Union and DUCA Financial, don’t lend outside of Ontario, so their often-leading rates aren’t available to customers in places like Alberta or B.C.
An extra 15 basis points (0.15 percentage points) isn’t the end of the world. There are still great rate deals to be had in the other provinces. Compare mortgage rates on sites like Rates.ca as a starting point. It lets you search for mortgage products from the country’s top brokers and financial institutions in seconds. And remember, while it may be tempting to stick with a lender you know (like your bank), that “comfort” could mean sacrificing some of your hard-earned money. Unless you have a tiny mortgage, it’s always worth the time to seek out better rate deals.
Try to be keenly aware of any restrictions tied to the mortgage, such as a shorter-than-normal rate hold (a “quick close” mortgage), higher than normal prepayment penalties (e.g., a penalty of 2.75% of the principal or six months’ interest), or a mortgage that doesn’t allow early termination or refinances.
While it’s important to do your own research and rate comparisons, using a broker outsources some of the legwork to someone who knows the landscape. Brokers can provide invaluable advice (make sure to do your homework and verify what they tell you, as not all brokers are created equal). Mortgage brokers also have established relationships with lenders and can sometimes fight for a better rate. Just ensure you understand that your broker is being compensated by the lender they recommend. If you want to hold their feet to the fire, ask them if there any are better offers available besides the one they recommended, even if it might pay them less.
If you own a home, consider refinancing to take advantage of a better rate. Doing so can lower your payments or let you tap equity to pay down (consolidate) your higher-interest debt. If you’ve got no better place to invest spare money, you can also make extra mortgage payments. This narrows the interest cost gap between lower rates outside of your province and the rates you have access to.
Rating of 5/5 based on 1 vote.
Save time and money with Loans Canada. Research and compare lenders before you apply. Share your experiences with Canada's top lenders.
Whether you have good credit or poor credit, building financial awareness is the best way to save. Find tips, guides and tools to make better financial decisions.
We are awarding $750 to a student every semester. All you have to do is show us how financial literacy has made a difference in your life.
Almost $500 in commission-free trades. Code “50TRADESFREE”. Conditions apply.
Borrow $500-$50,000 from Fairstone by May 31 and don’t pay until July.
Build credit while spending money with the Refresh Financial VISA card.
With KOHO’s prepaid card you can build a better credit score for just $7/month.
Check out our interview with addy; a platform that allows Canadians to invest in different properties across Canada with as little as $1.
All consultations and conversations with Loans Canada and its partners are confidential and risk-free. Speak with a trusted specialist today and see how we can help you achieve your financial goals faster. Loans Canada and its partners will never ask you for an upfront fee, deposit or insurance payments on a loan. Loans Canada is not a mortgage broker and does not arrange mortgage loans or any other type of financial service.
When you apply for a Loans Canada service, our website simply refers your request to qualified third party providers who can assist you with your search. Loans Canada may receive compensation from the offers shown on its website.
Only provide your information to trusted sources and be aware of online phishing scams and the risks associated with them, including identity theft and financial loss. Nothing on this website constitutes professional and/or financial advice.