Who Sets Mortgage Rates & How To Get the Best One

When you first start looking for a lender to give you a mortgage, you’ll find as many different mortgage rates as there are homes on the market. And as any good consumer knows, going with the lowest bidder doesn’t always give you the deal; and paying a high price doesn’t always guarantee quality and fairness. So how are you supposed to get the best mortgage rate for you, or even have a ballpark figure in mind; and why are different lenders allowed to have such varying rates? Who sets the mortgage rates in Canada anyway?
The Bank of Canada is the authoritative voice that determines what interest rates are across Canada. The rates fluctuate constantly and as they do, banks and lenders across Canada change their rate in order to reflect that. However, mortgage lenders are not legally responsible to charge the exact same mortgage rate as The Bank of Canada’s interest rate, and so are free to add a few extra digits here and there, wherever they see fit. This is the  why you may visit one mortgage lender and be shocked at their incredibly low mortgage rates, only to go to another and find their mortgage rates to be astronomical. With so much variation, how exactly how are you supposed to decipher between the different rates, let alone get the best deal for you?
First you need to educate yourself about The Bank of Canada, and its interest rates. Check their website daily to find the most recent interest rate, which will be a direct reflection of the mortgage rates you’ll be collecting. Then when speaking to different lenders, investigate not only their mortgage rate, but also what they’re offering along with that rate. Is the mortgage rate so low because it’s a variable rate that changes monthly? If so, it’s not a very stable mortgage. Or is what a lender lacks in an inflated mortgage rate also indicative of their lack in customer service? If so, it’s not going to be worth it in the long-term if you run into problems and can’t get ahold of your mortgage broker.
There is no real “right” answer as to how get the best mortgage rate. The best advice is to know what the current interest rate is according to The Bank of Canada, and always keep that in mind when looking at different mortgage packages. Another key to getting the best rate is to find a mortgage broker like CMI, who can present you with packages from hundreds of different lenders. This gives you the opportunity to pick and choose which packages are best for you, without having to actually sit down with each different lender going over your options, which can be both incredibly confusing, and time-consuming.