Advice for home buyers and homeowners of the right time to shop for a mortgage

October 3, 2012

Mortgage RatesWith record low mortgage rates and the possibility of a hike in the future, many Canadians are wondering if they should be shopping for a better mortgage rate. advises consumers on when to shop for a mortgage.

There are many occasions where consumers should research mortgage rates – not only when looking to buy a new home. The Canadian Association of Accredited Mortgage Professionals (CAAMP) states that nearly 70% of Canadians renew their mortgage without shopping around for a lower rate. Upon mortgage renewal, it is a great time to refinance mortgage payments and take advantage of competitive rates in the market. Keep these tips in mind on when to shop around for a mortgage.

New Homebuyers

It’s important to start mortgage shopping and obtain a pre-approval the moment you decide that you are ready to buy, even if you don’t have a specific home in mind just yet. This will help narrow your home search and once approved, the interest rate offered by your lender is “locked in” for up to 90 days, which protects you from an interest rate hike in the future. Try not to take the very first offer that comes your way, shop around for Canadian mortgage rates until you find a lender and terms that you are comfortable with.

Higher Mortgage Rate Holders

If your current mortgage rate is higher than today’s rates, it’s a good time to consider refinancing. Just keep in mind that there may be fees involved with switching to a new lender – such as penalty fees, legal fees, or the cost to have your home reassessed. Talk to your current lender before you do anything, as the lender may be willing to knock a few percentage points off your mortgage to keep you as a customer, or may be able to blend your existing mortgage rate with the current rate to lower your payments without the hassle of refinancing.

Change in Financial Situation

Sometimes, due to circumstances beyond your control, you may have been forced to go with a higher-rate mortgage due to perceived risk. This risk could be due to a small down payment, bad credit, or other factors. While you may have taken the mortgage because you didn’t have a choice, if after a few years your circumstances have improved there’s no reason why you shouldn’t shop around for better mortgage terms. Keep in mind that as with a refinancing there will likely be fees involved, but if the rate difference is large enough, it should cover the costs in the long term through more affordable monthly payments, or a shorter amortization period.

Term Expiring

When your current mortgage is close to expiry, it’s a good idea to start shopping around. Surprisingly, accordingly to Manulife Bank, only about 33% of Canadians bother to shop mortgage rates prior to renewal. Most simply choose to continue on with the same lender. Shopping around is highly advised, at the very least makes you aware of current market rates, so you can decide if you lender is offering you a good rate. You are the client, so don’t be afraid to negotiate or let them know you will respond once you have had a look at the competition. Once you find the rate you like, get pre-approved so you are protected from any short term rate increases prior to your renewal date. is a great place to start shopping around for mortgage rates. Compare mortgage rates instantly from mortgage, brokers, credit unions and other financial institutions; helping you find the lowest mortgage rate available.