BEWARE Of The Banker's Mortgage Rates

They're Not Always What They Appear To Be!

Almost every lender offers discounted mortgage rates. The problem is an individual mortgage shopper has a very slim chance of ever finding out who or what mortgage rate is really the best. Discounted rates range from 1% - 1.5% off the posted rates. Discounts are available on any term of mortgage that you want. Longer terms like 5, 7 and the 10-year mortgages have the largest discounts. Many lenders do not discount rates on all terms and many discounts are much less than what we quote. Many lenders don't even offer long-term mortgages. Bankers don't often advertise discounts and usually never offer the lowest discounts over the phone. Bankers usually make clients negotiate for their best mortgage rates. Your bankers best mortgage rate may not be the best mortgage rate!

What usually happens when you shop directly is this. You'll start negotiating with them on their interest rates. They start with the posted rate, (especially mortgage renewals). You mention discounted rates and they may offer a discount. You push them to go lower and they'll request a meeting with you. They need to call head office for final approval. Remember, bankers are very interested in your other banking business. In fact this is often more important to a banker than your mortgage. Bank branches and personnel are rewarded and paid for your extra banking business. This is called cross selling. This could be your R.R.S.P., G.I.C. or Mutual Funds, or opening a new bank account. Anyway, if you want to go through this hassle, you may just end up getting yourself a decent discounted mortgage rate.

The only problem now would be if a better interest rate came along and your banker didn't have it. You're back to square one. How will you ever know if you have the best? On your own, it's impossible.