Borrowers Are Leaving Money on the Table by Not Negotiating Rates

Date Posted: July 25, 2024

Many Canadians are adjusting their grocery shopping habits due to rising costs, but they're not being as proactive with their mortgage renewals, potentially costing them more money. 

A recent survey by Mortgage Professionals Canada shows that fewer homeowners are negotiating their mortgage rates at renewal time, even though many face higher interest rates. The study reveals that 41% of borrowers accepted the first rate offered by their lender, an increase from 37% two years ago. Only 8% negotiated their rate significantly at renewal, a drop from 16% in 2021. 

Many Canadians don't realize they can negotiate their rates or shop around for better deals. Typically, those that shop at major banks are locked into higher rates and have shown lower rates of satisfaction. This is why working with a broker can help you to save money and make smarter decisions.  

Canadians are often willing to haggle over smaller bills like phone or internet services but not their mortgages. Borrowers should approach mortgage renewal with the intent to find better deals elsewhere rather than staying with their current bank. 

Negative news about mortgage rates might be making borrowers hesitant to negotiate. A separate survey by Leger shows that many Canadians, especially younger ones, are financially stressed, which might contribute to their reluctance to haggle. Allowing a mortgage broker to negotiate and explore options on your behalf can allow you to take emotion out of the equation. Instead of only contacting 3 different major banks to compare options & rates, Mortgage Brokers have access to those same major banks, along with dozens of smaller lenders who may have better options. 

It may seem like you should accept the first offer given to you based on the hurdles it takes to apply for a mortgage, however, you may have more power than you think. Especially if you are refinancing your current mortgage. Always work with a mortgage broker to ensure you find the best option for you.