Is Comparing Mortgage Rates Really Worthwhile Nowadays?

Is-Comparing Mortgage

Comparing mortgage rates over the past few years can be exceedingly helpful nowadays, especially for consumers. And so, it is worthwhile.


This is because the decline in mortgage rates is faster now than ever before. With the graph sliding down almost every two days, Canada’s mortgage market is going up, though.


This is because homebuyers genuinely realize the benefit they can get at the moment. As you must already know, bigger your mortgage and interest rate, more you can save through every addition basis point of the discounted rate. No wise man would miss the chance to avail of the offer.


Well, an important thing to clarify here is that comparing rates is not a hectic task if so was your perception. With the added ease of available data sources, you can conveniently access mortgage rates over the past few years, the rise and decline, as well as the benefits and losses consumers have faced. If not, mortgage brokers and organizations can help with all of this.


Before we move ahead, it is significant to note why mortgage rates have been declining over time, whereas the rate comparison is more likely made while the rates go up


Why the decline in mortgage rates?


According to TransUnion, the average balance of Canada’s mortgage market now is up to $263,657.


Since the stabilization of the economy after the 2008 financial crisis, the rate has been going up. As per the latest data of Sep 2018, this figure has risen by another 4.23%.


With that, it would be right to interpret that Canada’s mortgage market is growing at a reasonable rate, and so, a decline in mortgage rates is not something to be surprised over.


The drop in mortgage rates is good for the homebuyers as 2019 might be the best time to get yourself another or a new house. According to economists worldwide, another financial crisis is predicted in the coming year. With this economic assumption, rates are to go lower and not higher anytime soon.


This has given a great chance to homebuyers if nothing else. Homebuyers can now save hundreds of dollars every month by refinancing as well as upon buying a new property.


How can refinancing help?


Refinancing can significantly help those who already bought a house and now are witnessing rate drop. Through refinancing, they can do some serious savings over time. Every mortgage loan that was started in 2018 experienced a rate drop through refinancing.


As per the total estimate, about 6.8 million homebuyers are now eligible for a refinance. This can help them save at least 75 basis points, which makes more than $260 a month.


About two months ago, the number of homeowners who could qualify for such significant savings was only around 2 million.


Refinancing, after comparing mortgage rates and observing a significant drop in interest rate, puts homebuyers on odds to leverage their home equity. This further gives consumers a chance to pay off their other high-interest debts such as car loans, student loans, credit cards, and whatnot.


This is a rare opportunity for Canadians to work on their financial well-being.


What do you need to know about a 5-year fixed rate?


When you talk about a fixed-rate mortgage plan, there’s a lot you need to know.


In the past two to three months, the lowest 5-year fixed rate increased by 119 basis points. The next statement would be of no surprise; higher the rates go, more is the interest any mortgagor needs to pay. With that comes good news: you can do more significant savings from each additional basis point of rate discount.


Another great thing about the scenario is that your lender choice is more comprehensive than it ever has been. The number of providers offering high discount rates has prominently increased over the internet in a short time.


To stay ahead of each other, providers are in high competition nowadays. Interestingly, the one benefitting most in such a situation is the consumer who would ultimately go for the most discounted rate provider.


About two years ago, the average Canadian mortgage was $22,360 lesser than what it is today, and the lowest 5-year fixed rates were 119 basis points cheaper. Suppose you slice off 10 basis points off a consumer’s rate, an average borrower saved around $1,125 over the five-year length of the fixed mortgage payment plan.


Looking at the current rate, if you still negotiate for merely 10bps off the mortgage payment, an average borrower saves $1,247, or only $122 more. Bear in mind the fact that this is just a rough idea of average discounting. Homebuyers can save more, given a more significant discount rate opportunity is availed.


Obviously, you are not going to get rich by saving an extra $122 off your mortgage payments in the whole five years, but who likes to leave money on the table when hard-earned?


Moreover, if the rates are to go up, still comparing rates is a better idea than anything else than crosses your mind. When looking for a mortgage, an average Canadian gets fewer than 2 quotes.


Assume that you are well qualified and get a quote from one lender, there are minimal chances that you get another quote from another lender at a lesser selling rate.


Therefore, with bigger mortgages and higher rates, spending every second on research is really worth it. It gives you a good idea about the deal you can get done with your mortgage broker or put before your real estate agent.


Research and digging into real-time facts has become an essential aspect of this fast-paced, modern world. Without these measures taken, you are always at a loss.


It is heathier to research on your own end, no matter how trustworthy your real estate agent or mortgage broker is. With basic knowledge of mortgage terms and rates, you can do great at mortgage rate comparison. And that is going to be in your favor at every turn.


You can see today’s rates by visiting our partner Citadel Mortgages –


Which type of mortgage is better in current rate circumstances?


The current mortgage rate situation is complex after the Fed rate cut and the announcement of Poloz to hold Bank of Canada rates on hold for a while. With this, it is challenging to interpret whether the mortgage rates are going towards a sudden increase or a rapid decline.


It is most probable that one day, mortgagors get up and hear about dropped mortgage rates in the news. It is highly unlikely that if the USA suffers, Canada does not.


Looking upon the current growth of the Canadian economy and stable financial market, it would be right to assume that the mortgage rates are going to stay on hold for a while.


Then, which type of mortgage plan should homebuyers choose: fixed or variable?


As far as comparing the mortgage rates is concerned, it is most beneficial when the mortgage rates are going up, and lenders offer homebuyers discounted rates. That’s when they can do the most savings.


In the long run, however, the variable mortgage payment plan is a wise decision to take even though around 66% of Canadians have chosen fixed mortgage plans.


This is because of the Bank of Canada follows Fed decisions anytime soon, the consumer with a variable mortgage is going to benefit the most. With the declining interest rate, you have a lesser amount to pay, and so, more savings can be done.


On the other hand, if you go for a fixed mortgage plan, you are most likely stuck on the fixed-rate, no matter how the mortgage rate fluctuates in the market. Even if you go for refinancing, most of the lenders allow you to refinance after you have maintained your original mortgage for at least 12 months.


In case you recently bought the house, you have to wait long. When you see other homebuyers saving more because of choosing a variable rate merely, it becomes longer.


Before you go for a fixed mortgage plan, make sure you check with the restrictions and limitations of your lender.


Coming back to what is going to happen to the mortgage rate in the near future, it is highly likely to stay the same, with minimal fluctuation; for now, the bank of Canada is on its own.


In case the mortgage rate drops anytime soon, going for a variable mortgage is the best option. This is because you will be able to pay off your mortgage faster because less amount is going towards interest.


It helps you save more than what you can in the discounted rate given forward by mortgage providers.

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The Takeaway – Comparing Mortgage Rates


Buying a home is not an easy task, and it should not be either. If it becomes natural, the mortgage market will suffer a lot. The fluctuations and procedures keep the system running. To benefit from that system, go for mortgage rate comparisons.


What you need to take away from this post is that make wise decisions keeping in view the fluctuations in mortgage rates. No matter it goes up or down, the only thing you need to do is comparing mortgage rates for its critical today than it was two months ago.


In case the mortgage rate goes high, you are most likely to get a discounted rate in which you can save a significant amount. However, if it declines, going for a variable mortgage plan can help with ore savings.


A better framework can be planned out after you research and compare mortgage rates. Then, keep all the options in front of yourself and goes for the one that is better in the long run.


By using a mortgage agent or mortgage broker from Citadel Mortgages, you will be able to ask all the questions you have and be ensured you get the best advice and mortgage product for your mortgage needs. Contact Citadel Mortgages to become mortgage and debt-free sooner!

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