The lowest mortgage rate can be the most expensive mortgage you ever take. There. I said it.
And before anyone comes for me — yes, rate matters.
Of course it does.
But if the only question you’re asking when choosing a mortgage is: “Who has the lowest rate?”
You’re not asking enough questions.
Not All Mortgages Are Created Equal
A lender can offer you a rate that is 0.05% or even 0.10% lower than someone else and, on the surface, it looks like the obvious choice.
But what happens if you need to break that mortgage?
What does the penalty look like?
Can you port it?
Can you refinance before maturity?
What are the prepayment privileges?
Is there a bona fide sales clause?
Is the mortgage registered as a collateral charge?
What happens if life changes?
Because life changes.
People separate.
People move.
People get transferred.
People need to consolidate debt.
People renovate.
People lose jobs.
People get new jobs.
People inherit money.
People decide they want to sell.
And suddenly that “amazing” rate isn’t the only thing that matters.
A Lower Rate Today Could Cost You More Tomorrow
I’ve been a Mortgage Broker for 18 years and I can tell you this with certainty:
The cheapest mortgage on day one is not always the cheapest mortgage over the life of the term.
Sometimes saving a few dollars a month in interest can cost you thousands later if the mortgage doesn’t give you the flexibility you need.
And this is exactly why I get a little twitchy when someone says:
“Just give me your best rate.”
Because my job isn’t to find you a number.
My job is to help you choose a mortgage.
There’s a difference.
What Is the Best Mortgage for You?
A good mortgage strategy considers the rate, yes — but it also considers the lender, the product, the terms, the penalties, your plans and your financial situation.
The question shouldn’t just be:
“What’s the lowest rate?”
It should be:
“What is the best mortgage for me?”
Sometimes those are the same answer.
Sometimes they absolutely are not.
And that 0.05% you were so excited to save? It may turn out to be the most expensive 0.05% of your life. 😉
Ready to Look Beyond the Rate?
Let’s look at your options, compare the details, and find a mortgage that makes sense for your goals.
