When looking for a mortgage, Canadians are increasingly prioritising getting the lowest mortgage rate in the hopes of achieving the greatest savings, according to a study by Rates.ca.
Getting a low rate is a crucial factor when getting a mortgage for three in four Canadians, while almost half said it is their number-one mortgage goal.
Many Canadians mistakenly associate lowest rates with the biggest savings, said Rob McLister, mortgage editor at Rates.ca. According to the study, only 19% of Canadians said the lowest overall borrowing cost is their primary goal.
"The lowest total borrowing cost, which includes interest, fees and penalties, always matters more than the lowest rate," McLister said.
Canadians are also willing to sacrifice traditional mortgage advice for a lower rate.
Around 45% of Canadians would consider getting a mortgage without talking to people on the phone or in person if it meant getting a lower interest rate. For this group of people, the rate savings would have to be at least 0.05 to 0.2 percentage points. A 0.2-percentage point reduction in mortgage rates could save borrowers up to $195 annually per $100,000 worth of mortgage.
"Just as we saw with online stock brokerages a few decades ago, a growing segment of borrowers is willing to make their own mortgage decisions online without a banker's advice," McLister said.