Blog

Loyalty Doesn't Pay When it Comes to Mortgage Renewals

Finally there is a study to back up what mortgage brokers have been saying for years.  A Bank of Canada study found that loyal bank customers don’t necessarily get the best deal when they renew mortgages.  People who switch lenders and first-time buyers do.

Many people are under the belief that because they have been a loyal client with the institution they bank with they would automatically get a better rate.  This is not the case according to evidence in a Bank of Canada paper called Discounting in Mortgage Markets.  They found people who switch banks get a better deal.  This is due to the fact that new customers offer banks an opportunity to sell more products.

The study also found that mortgage brokers find the best rates, since mortgage brokers are paid by the lender not the customer so they are not confined to one lenders products.

First-time buyers do well because they are more likely to have shopped around since they have tight budges.  They’re a higher risk group for the bank because they have so much debt but over time the bank can sell them more services.

About 1/4 of Canadian mortgages are done via mortgage brokers but 40% of first time home buyers use a mortgage broker.  Upon renewal, people still just sign the letter from the bank thinking the bank is taking care of them.  It is time to read the small print.


For the full article click here.
 
Tony Marchigiano1-155 Water Street
Mortgage BrokerVancouver, BC
 
cell: 604 505 7109
fax: 604 909 4666

Newsletter

*indicates required fields.
Name:*
Email:*

Meet the team

  • Will Pratt
  • Justin Sabbagh
  • Mike Wilcox

Mortgage Calculator

Purchase Amount:
Down Payment:
Interest Rate:
%
Payment Interval:
Mortgage Term (Years)
Payment:
Total Payments:
Total Amount Paid:
Total Interest Paid:

Neighbourhoods

The data relating to real estate on this website comes in part from the MLS® Reciprocity program of either the Real Estate Board of Greater Vancouver (REBGV), the Fraser Valley Real Estate Board (FVREB) or the Chilliwack and District Real Estate Board (CADREB). Real estate listings held by participating real estate firms are marked with the MLS® logo and detailed information about the listing includes the name of the listing agent. This representation is based in whole or part on data generated by either the REBGV, the FVREB or the CADREB which assumes no responsibility for its accuracy. The materials contained on this page may not be reproduced without the express written consent of either the REBGV, the FVREB or the CADREB.