When it comes to mortgage rates, it pays to shop around

Finding the best rate

Mortgage rules have changed and evolved over the years.

I was chatting with one of my broker friends to clarify one of the newer guidelines and she sighed and said how hard it it is to stay on top of the policies when they shift so often.

With the introduction of the “stress test” in 2016, we were qualifying clients for either the Bank of Canada benchmark rate (which changed multiple times) or the clients’ interest rate plus two per cent. Most of my clients whose mortgages were coming up for renewal had to qualify at 4.94% or even 5.25%. Interestingly, that was in the ballpark range of where interest rates with many lenders now sit.

I discussed his upcoming renewal with one of my favourite clients. His current lender offered him a renewal rate he was not happy with. Because I had consent from the client, I called the lender to double check if they could do any better than their initial offer. They could not. Because of their internal policy, and the terms of the client’s mortgage, it truly was the best they could offer him.

Because of a fairly recent change to qualification guidelines, other lenders are able to offer far more attractive rates because of the amount of equity he has in his home and the initial purchase price of his home five years ago.

His particular lender is one of my favourites and is usually highly competitive at renewal time. I was very surprised about the loophole in their policy.

Making a long story short, we will be switching to a different lender and saving my client 0.8% on his mortgage rate, which in his case equates to a savings of $21,315.00 over the next five years.

While rate isn’t always the deciding factor, it really pays to do your homework at renewal time.

This article is written by or on behalf of an outsourced columnist and does not necessarily reflect the views of Castanet.

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About the Author

Tracy Head helps busy families get a head start on home ownership.

With today’s increasingly complicated mortgage rules, Tracy spends time getting to know her clients and helps them to better understand the mortgage process. She supports her clients before, during, and after their mortgage is in place.

Tracy works closely with her clients, offering advice and options. With access to more than 40 different lenders. She is able to assist with residential, commercial, and reverse mortgages in order to match the needs of her clients with the right mortgage package.

Tracy works hard to find the right fit for her clients and provide support for years down the road.

Call Tracy at 250-826-5857 or reach out by email [email protected]

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The views expressed are strictly those of the author and not necessarily those of Castanet. Castanet does not warrant the contents.

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