Compare Mortgage Rates in Edmonton
There are varying degrees of expertise when it comes to shopping for a mortgage. The beginner goes straight to their branch and is so happy with their pre-approval, they don’t even ask about the rate. There is the novice, who knows that you have to shop around to get the best rate, but they don’t look any deeper than the percentage. And lastly, there is the expert, who knows there is a lot more to a mortgage than just the rate. Its our job at RateDeals.ca to compare mortgage rates in Edmonton to make you look like an expert!
Fixed Rate Mortgage Comparison
Fixed term rates seem like a they should be fairly straight forward; 3% is lower than 3.10%. This is true, but there is a lot more to it than that. First off, how do they calculate the interest? Credit Unions for example have a long history of calculating the interest on their mortgages monthly instead of semi-annually like the majority of mortgage lenders. This 0.10% is roughly equivalent to the difference in monthly to semi-annually calculations, so its not a straight forward comparison. Secondly, what are your prepayment options? A mortgage that offers 20% prepayment has more ‘discount’ built in than a mortgage with only 15%; this may not mean anything to you today, but someday it might. Lastly, how does the lender calculate their penalty for early payout (or do they even allow it)? A number of lenders lately have started to use ‘funky math’ to increase their clients penalties which affect the overall cost of borrowing for the client. Its not so easy to compare mortgage rates in Edmonton once you add in all these extra variables.
Even at an expert level however, it is difficult for a client to understand how the banks penalty calculation will work in a real world scenario; 3 months interest or interest rate differential is the standard explanation. You need to understand how they calculate the interest rate differential portion, as that is the problem with these mortgages. Most of the big banks now calculate IRD by taking your original discount off of the length of the remaining term and compare that rate with what you have today; this is NOT how you should calculate this penalty!
Lots of Fine Print When You Compare Variable Mortgage Rates
Variable rate mortgages require a whole new level of expertise to truly understand what you are getting. Regardless of the type of institution, the interest calculation can be either monthly or semi-annual. A small difference but an easy one to spot. Secondly, what is the penalty to get out of the mortgage? The great thing about variable products are the penalties, they are usually only 3 months interest; the banks haven’t figured out a way to gouge clients on these quite yet.
Most importantly however with the variable rate products is the lock in rate; what will your rate be should you choose to switch to a fixed product at some point down the road? The banks will often say they will give you ‘our going rate’ at the time. This is exactly what you don’t want to hear. Ideally, you want the lenders ‘wholesale mortgage rate’, or ‘best rate’ which unfortunately with the banks is hard to nail down as it is different for everybody. On the flip side, a lot of our mortgage companies only deal in wholesale rates, so you will always know the rate you will be locking into for a fixed term. This scenario is where a majority of clients get burned by their banks and drive up their cost of borrowings on variable products.
You Might Be Surprised How Much a Small Difference Will Save You
Try our mortgage calculator below to see how much you can save by working with us versus your bank. There is a certain amount of comfort that comes with dealing with your lender, however by not securing the best mortgage rates in the market, you are simply paying a premium for the privilege of working with your bank. The difference you see below is going straight to the banks bottom line, and out of yours.
Before signing on the dotted line with your branch, let us compare mortgage rates in Edmonton for you. We think you will be glad you did!