Report: Close to 40% of Canadians don’t know bank mortgage rates are negotiable
LowestRates.ca study shows consumers want transparency and clarity in mortgage decisions
Canadians want clarity and transparency when it comes to their mortgage rates. This according to LowestRates.ca, an online comparison site for personal finance products like insurance, mortgages, loans and credit cards, which today released survey findings examining Canadian views on mortgage rates.
The survey found that close to 40% of Canadians (37.1 per cent) didn’t know they could negotiate their mortgage rate at all, meaning they simply accepted the first offer they received when seeking out a mortgage. Also, more than half of respondents (53.7 per cent) found the concept of negotiating mortgage rates unfair.
Meanwhile, 89.8 per cent of those surveyed said that banks should openly advertise the lowest mortgage rates they’re willing to offer consumers.
“Simply put, Canadians want to know exactly what they’re walking into when it comes to their mortgage rate,” said Justin Thouin, CEO and co-founder of LowestRates.ca. “Canadians already have enough questions when deciding on a mortgage, whether it be about fixed vs. variable, rate hikes, and anything else that may pop up. Public mortgage rates shed a little light on a high stress decision, and make life a little easier for anyone.”
With less than half of Canadians (46.3 per cent) currently having a mortgage, knowing how to find and negotiate the best mortgage rates will be an important skill in the near future. A mortgage typically represents the largest expenditure in anyone’s life, and not knowing that a mortgage rate is negotiable at a bank can mean spending thousands more per year in interest payments unnecessarily.
Unfortunately, as LowestRates.ca has found previously, Canadians’ financial literacy isn’t as strong as they think it is. The report, done in 2017, found that most Canadians were unsure of what an amortization period was, or even what the definition of a ‘mortgage term’ was. With this much confusion around basic mortgage terms, it’s unsurprising that Canadians are uncomfortable negotiating their own mortgage rates.
“Understanding mortgage rates and how much you should be paying comes down to financial literacy, and people are looking to strengthen that aspect of their lives” said Thouin. “Understanding how they can pay the lowest amount of interest possible comes with researching the best options. Canadians want to learn, and they need the tools and the information to be able to do that.”