Posted Bank Mortgage Rates
Posted bank mortgage rates are the rates banks ‘post’ online or in their branches. Generally this is the benchmark at which the bank begins their negotiation with the client. It is also the rate used to qualify you on insured deals. Although it may seem as if these rates are irrelevant to most buyers, they are quite key as they are also the point from where banks calculate their mortgage penalties. For most new mortgage clients, the bank will offer a discount off of the posted rate right from the start. For clients looking to renew their mortgage however, more often than not they will be offered the banks posted mortgage rates.
Posted Mortgage Rates in Alberta Are Just a Starting Point
Although very few consumers will be offered the posted rates today on a new deal, it is important to know what sort of discount to expect. This discount used to be fairly set, .75% for most clients, 1% for the best clients. Today we are seeing discounts of 2.25% or more, it really depends on how the banks manipulate their posted rates. By leaving rates high and offering a bigger discount, it increases your mortgage penalty if you were to payoff early. Posted rates are not irrelevant, its important to understand how they relate to your mortgage.
If possible, we use lenders who don’t even have posted rates, they work strictly off of wholesale rates. This means any penalties, renewals, blends and extends all work off of the one rate. The big banks do not operate this way, and this is why we try to avoid them when we can.
These posted mortgage rates are updated daily from TD Canada Trust. It is also important to note, that posted rates are not uniform across the banks. If you are in the market for a new mortgage, it is imperative that you compare mortgage rates, and understand the fine print. Paying too much on your mortgage today, will hurt you for the next 5 years.