Spring Housing Market Update: Negotiating for the Best Mortgage Rates

Stay ahead of the game as the spring housing market approaches. Learn how to secure the best mortgage rates with expert tips and insights on potential interest rate cuts by the Bank of Canada.

As the spring housing market approaches, some mortgage rates are becoming more affordable. However, experts suggest that negotiating for the best rate is key to securing a favorable deal. Anticipation of a potential interest rate cut by the Bank of Canada later this year has already led to a decrease in rates for certain fixed mortgage products. These rates are influenced by the bond market, which can fluctuate based on expectations regarding the central bank's policy rate direction. As a result, rates on some three- and five-year fixed rate mortgages have fallen below five per cent, as reported by comparator site Ratehub.ca.

When it comes to mortgage rates, first-time homebuyers may receive more competitive offers at the time of purchase compared to those renewing their mortgage. Renewing homeowners are often presented with less favorable rates initially, typically falling between the lender's posted rates online and the lowest rate they are willing to offer. To secure a better rate, it is recommended to shop around and have a comparable rate from another source ready to present to your existing lender. This gives them the opportunity to match or exceed the offer, or risk losing your business.

In preparation for a mortgage renewal or planned purchase, experts advise having a rate offer ready well in advance. A mortgage professional can secure a rate for you up to 120 days or four months before it is needed. If your current lender is unwilling to match a broker's best rate and you decide to switch providers at renewal, ensure you have necessary documents such as pay stubs and property records readily available to expedite the process.

While mortgage rates may be trending downward, it is essential for borrowers to be proactive in negotiating for the best possible rate. By shopping around, being prepared with rate offers, and considering switching providers if necessary, homeowners can potentially secure a more favorable mortgage deal.