Mortgages - So Much More Than Just the Lowest Rate!

Jen & Cory • January 16, 2019

There aren't too many Canadians who are able to save up enough money to pay cash for their home. This is why we have mortgages. A mortgage is a loan made to assist a borrower to purchase a property. The property is held as collateral and interest is charged on the loan. Typically a mortgage will be paid back over 25 years (this is called the amortization), and the amount of interest charged is renegotiated every 1-10 years (this is called the term). Over the long run, borrowing money isn't cheap, despite interest rates being at an all time low!

So, if you need to borrow money in order to buy a property, your number one goal should be to keep your cost of borrowing as low as possible. Bolded and italicized for emphasis. Now, contrary to what years of marketing messaging would have us believe, this doesn't always mean choosing the mortgage with the lowest rate. Although choosing a mortgage with a low rate is a part of lowering your borrowing costs, it's not the only factor.

When looking to lower the overall cost of borrowing throughout the life of your mortgage, there are many factors that should be considered. Here are some of them.

  • How long do you anticipate living in the property? This could help you decide an appropriate term.
  • Do you plan on moving for work, do you need flexibility down the road with your mortgage?
  • What does the prepayment penalty look like if you have to break your term? This is probably the biggest factor in lowering your overall cost of borrowing.
  • How is the lender's interest rate differential calculated, what figures do they use?
  • What are the prepayment privileges?
  • Can you make lump sum payments, or increase your monthly payments, and how is the interest recalculated when you do pay extra?
  • Is the mortgage a collateral charge? This could mean you won't be able to switch the mortgage upon renewal to another lender without incurring new legal costs.
  • Should you consider a fixed rate, variable rate, HELOC, or a reverse mortgage?
  • What is the size of your downpayment? Coming up with more money down might lower (or eliminate) mortgage insurance premiums.

What you will often find is that mortgages with the rock bottom, lowest rates, can have potential hidden costs built in to the mortgage terms that will cost you a lot of money down the road. The difference between 2.59% and 2.69% could save you a few bucks a month, while taking a longer fixed rate term and having to break the mortgage halfway through the term could potentially cost you thousands (tens of thousands). And this is really bad for your overall cost of borrowing.

As a mortgage consumer who will potentially buy a handful of houses in their life, your best bet is to work with an independent mortgage professional who has your best interest in mind and knows exactly how to keep your cost of borrowing as low as possible. A mortgage is so much more than just a low rate, it's really about the fine print.

If you would like to talk more about your financial situation or figure out a plan so you can plan ahead for your mortgage, please contact us anytime!

Jen & Cory
YOUR MORTGAGE EXPERTS

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Bank of Canada Rate Announcement Jan 28th, 2026

By Jen & Cory • January 28, 2026
Bank of Canada maintains policy rate at 2¼%. FOR IMMEDIATE RELEASE Media Relations Ottawa, Ontario January 28, 2026 The Bank of Canada today held its target for the overnight rate at 2.25%, with the Bank Rate at 2.5% and the deposit rate at 2.20%. The outlook for the global and Canadian economies is little changed relative to the projection in the October Monetary Policy Report (MPR). However, the outlook is vulnerable to unpredictable US trade policies and geopolitical risks. Economic growth in the United States continues to outpace expectations and is projected to remain solid, driven by AI-related investment and consumer spending. Tariffs are pushing up US inflation, although their effect is expected to fade gradually later this year. In the euro area, growth has been supported by activity in service sectors and will get additional support from fiscal policy. China’s GDP growth is expected to slow gradually, as weakening domestic demand offsets strength in exports. Overall, the Bank expects global growth to average about 3% over the projection horizon. Global financial conditions have remained accommodative overall. Recent weakness in the US dollar has pushed the Canadian dollar above 72 cents, roughly where it had been since the October MPR. Oil prices have been fluctuating in response to geopolitical events and, going forward, are assumed to be slightly below the levels in the October report. US trade restrictions and uncertainty continue to disrupt growth in Canada. After a strong third quarter, GDP growth in the fourth quarter likely stalled. Exports continue to be buffeted by US tariffs, while domestic demand appears to be picking up. Employment has risen in recent months. Still, the unemployment rate remains elevated at 6.8% and relatively few businesses say they plan to hire more workers. Economic growth is projected to be modest in the near term as population growth slows and Canada adjusts to US protectionism. In the projection, consumer spending holds up and business investment strengthens gradually, with fiscal policy providing some support. The Bank projects growth of 1.1% in 2026 and 1.5% in 2027, broadly in line with the October projection. A key source of uncertainty is the upcoming review of the Canada-US-Mexico Agreement. CPI inflation picked up in December to 2.4%, boosted by base-year effects linked to last winter’s GST/HST holiday. Excluding the effect of changes in taxes, inflation has been slowing since September. The Bank’s preferred measures of core inflation have eased from 3% in October to around 2½% in December. Inflation was 2.1% in 2025 and the Bank expects inflation to stay close to the 2% target over the projection period, with trade-related cost pressures offset by excess supply. Monetary policy is focused on keeping inflation close to the 2% target while helping the economy through this period of structural adjustment. Governing Council judges the current policy rate remains appropriate, conditional on the economy evolving broadly in line with the outlook we published today. However, uncertainty is heightened and we are monitoring risks closely. If the outlook changes, we are prepared to respond. The Bank is committed to ensuring that Canadians continue to have confidence in price stability through this period of global upheaval. Information note The next scheduled date for announcing the overnight rate target is March 18, 2026. The Bank’s next MPR will be released on April 29, 2026. Read the January 28th, 2026 Monetary Report

Everything You Need to Know About Mortgage Financing in Canada

By Jen & Cory • January 21, 2026
For most Canadians, buying a home isn’t possible without a mortgage. And while getting a mortgage may seem straightforward—borrow money, buy a home, pay it back—it’s the details that make the difference. Understanding how mortgages work (and what to watch out for) is key to keeping your borrowing costs as low as possible. The Basics: How a Mortgage Works A mortgage is a loan secured against your property. You agree to pay it back over an amortization period (often 25 years), divided into shorter terms (ranging from 6 months to 10 years). Each term comes with its own interest rate and rules. While the interest rate is important, it’s not the only thing that determines the true cost of your mortgage. Features, penalties, and flexibility all play a role—and sometimes a slightly higher rate can save you thousands in the long run. Key Questions to Ask Before Choosing a Mortgage How long will you stay in the property? Your timeframe helps determine the right term length and product. Do you need flexibility to move? If a work transfer or lifestyle change is possible, portability may be important. What are the penalties for breaking the mortgage early? This is one of the biggest factors in the real cost of borrowing. A low rate won’t save you if breaking costs you tens of thousands. How are penalties calculated? Some lenders use more borrower-friendly formulas than others. It’s not easy to calculate yourself—get professional help. Can you make extra payments? Prepayment privileges allow you to pay off your mortgage faster, potentially saving years of interest. How is the mortgage registered on title? Some registrations (like collateral charges) can limit your ability to switch lenders at renewal without extra costs. Which type of mortgage fits best? Fixed, variable, HELOCs, or even reverse mortgages each have their place depending on your financial and life situation. What’s your down payment? A larger down payment could reduce or eliminate mortgage insurance premiums, saving thousands upfront. Why the Lowest Rate Isn’t Always the Best Choice It’s tempting to chase the lowest rate, but mortgages with rock-bottom pricing often come with restrictive terms. For example, saving 0.10% on your rate may put a few extra dollars in your pocket each month, but if the mortgage has harsh penalties, you could end up paying thousands more if you break it early. The goal isn’t just the lowest rate—it’s the lowest overall cost of borrowing . That’s why it’s so important to look beyond the headline number and consider the whole picture. The Bottom Line Mortgage financing in Canada is about more than rate shopping. It’s about aligning your mortgage with your financial goals, lifestyle, and future plans. The best way to do that is to work with an independent mortgage professional who can walk you through the fine print and help you secure the product that truly keeps your costs low. If you’d like to explore your options—or review your current mortgage to see if it’s really working in your favour—let’s connect. I’d be happy to help.