If you have never taken out a mortgage before, or even if you have, there are certain questions that you need to talk to your mortgage broker or lender about in order to end up with the absolutely best home loan for your financial situation. There is, however, one question that stands out from the rest that you may not know about.
Can I get a lower rate?
This is the one question that you should be asking your mortgage broker that can help you potentially save thousands of dollars on your mortgage. In a recent survey conducted by the Globe and Mail that polled over 300 mortgage owners, 82% of them said that they were able to get a better rate when they asked this question. In fact, they were able to secure a rate that was better than the official rate being advertised by the lender. All it took was a bit of negotiation.
The people that were applying for a mortgage and haggled for a lower interest rate than what was being advertised ended up paying less. The numbers were reported in the survey applied to mortgage holders with fixed-rate five-year mortgages where the interest rates were widely varied.
Of the surveyors that were negotiating for their lower interest rates, 45% reported a 3% or lower rate being secured with the lender while only 32% that didn't try to bargain for a lower number ended up with this low rate. As well, 16% of the people that didn't take the time to negotiate ended up paying more than 4% in their rate compared to the 5% of the bargainers that put negotiations into place.
Don't necessarily assume that the mortgage rate being proposed by the lender is the bottom rate. All it takes is a few extra minutes to start up negotiations and this can turn into a long-term payoff down the road in the form of interest savings.
A lot of people aren't aware that the possibility of negotiating a lower rate is even allowed. Now that you know, you have absolutely nothing to lose and everything to possibly gain by challenging the rate being offered and asking for a lower one. Be 100% respectful when you walk into the office and bargain with confidence and you just may end up saving thousands of dollars yearly and monthly over the term of your home loan.
In order to see exactly how much you can save just with a drop of even .01% on the interest rate, use a mortgage calculator to crunch the numbers. You'll be surprised to see the difference that even small interest-rate changes can make over the life of your mortgage.