Lender Loyalty Could Cost Canadian Consumers Thousands

RateSupermarket.ca Pledges to Inform Canadians of Mortgage Money Saving Options

TORONTO, March 9, 2010 … RateSupermarket.ca, Canadian consumers’ one-stop-site to quickly and easily compare over 500 mortgage rates from the country’s top providers, is embarking on a campaign to educate Canadians that shopping around for the best mortgage rates at renewal time could save them thousands.

“Mortgage rates are at near all time lows and many Canadians are missing an opportunity to get better rates by staying loyal to their existing mortgage providers,” said Kelvin Mangaroo, Founder, RateSupermarket.ca. “We want to let Canadians know that they have many options when renewing their mortgage and are in a position of power. By comparing lenders and brokers on our site you could easily save thousands.”

A recent poll of 413 Canadians conducted on the RateSupermarket.ca site showed that 50% of consumers renewed their mortgages without shopping around for better rates. This means that half of the surveyed Canadians are likely paying above what they should for their mortgages. A standard Canadian bank posted 5 year fixed rate is currently 5.39%, but the lowest 5 year fixed rate on RateSupermarket.ca is 3.69%. That difference could cost Canadians an extra $3,407.52 a year in mortgage payments (assuming an average home loan of $300,000 paid over 25 years.)

“Even if you’re a savvy negotiator and can get your banks posted rate down 1.00% to 4.39%, you’re still looking at paying an extra $1,368.84 a year by sticking with your existing lender,” added Mangaroo.

Case Study:

Oakville, Ontario

Back in July, Allen and his wife purchased a house in Oakville when the credit markets were very tight. They secured a mortgage at Prime + 0.70%, which was the best rate they could find at the time. Afterwards, Allen kept a close watch on the 5 year variable mortgage rates on RateSupermarket.ca as he wanted to refinance when rates dropped.

“In January of 2010, mortgages started to enter that prime minus environment that I was waiting for,” said Allen. “As a recent first time homebuyer I did not really know my options so I continued to visit RateSupermarket.ca to watch the rates and educate myself on my options.”

Allen used the website as a resource to answer his questions and further educate himself on mortgage rates. A consultation call with a broker through RateSupermarket.ca empowered Allen with some great negotiating tools and resources. “I explained my refinancing situation to Jim and he was able to give me a lot of interesting facts on what to expect in terms of costs and breakage (penalty) fees in raw numbers. He also asked some good questions about my living situation to determine if it was worth my while to refinance at this point.” added Allen.

In the end, armed with insight from RateSupermarket.ca, Allen re-financed his mortgage and will save thousands over the next few years.

“We want Canadians to know that they always have options when it comes to their mortgage,” added Mangaroo. “Even using a mortgage broker might not be enough to ensure you’re getting the best deal. Different brokers have different relationships with various lenders, and some brokers, due to the large volumes they process, are able to access special rates and products that others can’t get. So it makes sense to not only compare banks against brokers, but the top brokers against other brokers, as we do on RateSupermarket.ca.”

Case Study

Calgary, Alberta

Christie had been with Royal Bank for over 13 years, her first mortgage was with them and she had many accounts both business and personal.
“I have an excellent credit score. I have a high income and I’ve never missed a payment on anything,” said Christie. “I usually make frequent additional payments to loans, yet when my account manager left and I was designated a new account manager they would not even match mortgage offers from banks I’d never done business with on my mortgage renewal 3 years ago. I was shocked and angry.”

Christie went to RateSupermarket.ca looking for a better deal and compared many rates and options with an approved mortgage broker. The broker found her a better deal with a lower rate and the switch was completed within one week.

“Due to the economic conditions and favourable interest rates I’ve chosen to pay a penalty on my previous mortgage and have switched lenders,” added Christie. “Bottom line – there are better offers and options out there. I should be able to save thousands of dollars and pay off my mortgage a few years sooner. All you have to do is ask. I’d never have thought it would be that simple but it was. Gone are the days of putting on your best suit, hat in hand to the bank manager begging for a loan!”

About RateSupermarket.ca (www.ratesupermarket.ca)


RateSupermarket.ca is an independent, impartial resource that is not affiliated with any mortgage lender or broker. It is the only resource in Canada that allows visitors to compare the whole mortgage market in the country. RateSupermarket.ca also compares insurance products, credit cards and GIC rates.

Related Topics

Personal Finance / Personal Finance News / RSM News

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