Four Reasons Why You Might Not Get The Great Mortgage Rate You Saw Online

Globe and Mail ~ March 14th, 2019

he internet isn’t the friend it once was to people looking for the lowest mortgage rate.

All the mortgage-rate comparisons you’ll ever want to see are available online, but there’s an increasingly problematic lack of context and explanation. If you spot a great rate online, look for asterisks and fine print that explain who qualifies. Lots of people won’t.

Here’s a roundup of some of the most common reasons why the best mortgage rates you see online may not be available to you or have unexpected twists.
You have a down payment of 20 per cent or more

People who have a down payment of at least 20 per cent are considered better lending risks than people who put less money down and thus don’t have to pay for mortgage default insurance. Yet mortgage rates are notably better for people who put less than 20 per cent down and thus have what’s called a high-ratio mortgage.

Mortgage lenders offer better rates on high-ratio mortgages because of mortgage-default insurance. Lenders know they’re protected if you stop paying your mortgage, and that means they’re more willing to offer a good rate.

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