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Do you know the biggest difference between working on your mortgage with a bank vs. a mortgage broker? The bank can only see its own rates and products. However, our mortgage brokers have access to products from hundreds of lenders and can find something for your unique needs.

Here are a few things to keep in mind while doing business with your bank.

Penalties Hurt

When you take out a loan or mortgage, you are signing a contract with the lender. If your mortgage is with a traditional bank, it can often come with a steep penalty if you break the contract before your term is complete. Big banks typically have higher penalties to break a mortgage contract than alternative lenders, so it is worth shopping around. Most bank loans have terms of five years or more – a lot can happen in that time, you only have to take a look at the current situation in the world to realize just how quickly things can change. On average 60% of Canadians will pay out or restructure their mortgage before the five-year term so it is worth having the lowest penalty possible.

While your bank may offer you a low rate, a high break penalty is often built-in. One of our mortgage brokers would be happy to help you locate the best mortgage contract with as minimal penalties as possible so you can be prepared for anything the future could hold.

Your Credit Health

Most of us have received a letter from our bank offering a line of credit, urging us to increase the limit on our credit card or to sign up for a new card. These letters typically leave out how this will affect the health of your credit score and where you currently stand. You might even be paying a high interest rate on your current financial products, not realizing that you could be getting a better rate with a different provider based on your credit score.

This is where a broker comes in to help you review your financial situation and ensure that you get the best mortgage – at the best rate – based on your current credit health.

You Should Shop Around

A bank only has access to its mortgage rates. While most people will stay with the same bank for many years, there can be a cost for that convenience. More often than not, people who are renewing will be offered a higher rate than a new customer. Using a broker to shop around, especially at renewal time, is a great way to ensure that you get the best rate available.

Be wary of your bank offering you a renewal rate six months before your term is up, more often than not this is not their lowest rate as they are aware you won’t be shopping for a better rate at that time.

When you are a few months away from renewal, contact your broker. We would be happy to help you determine if you are getting the best deal on your mortgage before you renew.

Contact one of our brokers today to book your appointment and see what we can do for you.



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