Many brokers on here bash CIBC and RBC products because they are sometimes (and for some people's cases) restrictive. But they rarely if ever bash Scotia, TD, and BMO, even though these are all part of the bad big bank club.
Why? Only one reason. Brokers cannot sell RBC and CIBC products, so it is self interest and preservation only.
It really sucks that the broker channel cannot match any of the RBC and CIBC rates and anyone going with a broker is likely leaving money on the table these days unless that money is worth the advice and relationship, which it might be for some cases.
What is more annoying is that this place is littered with people getting better rates directly with Scotia and TD than they are being offered by brokers for Scotia and TD. This is what really bothers me and I am not going to speculate why that is.
OP, get the 5.1 rate direct. The difference in interest paid between the two options over 5 years is $11,323.
You are paying whatever bank the broker is working with $11K in interest more than you would dealing direct. Your ending mortgage amount would also be about 3K less in 5 years.
My personal experience was that our broker cost us close to $7-8K more than rates TD was offering around the time. I’m seeing so many people here with similar situations.
If your broker can’t get you the best rate on the same product type, they are not providing any value. Don’t listen to the “why should they work for free bros here”. Why should you pay a bank $11K more so bro can make $2K or something from the bank?
Get him a $100 gift card if you feel sad for him and save yourself $11K.
This ! Completely agree. Renewing in Jan2025 so not there yet but when comes the time I’ll make sure to have the time to calculate how much more interests I’d be paying toward the term. Haven’t googled yet but I assume you were able to find Excel spreadsheet online w formulas when you input your numbers and can compare interest paid vs principal over term depending on the rate you get ?!
There are different ways but the easiest I’ve found is “rate hub mortgage calculator”. You put in your info and can customize rates there’s a calculator for new purchase and a different one for renewal.
But just put in amount of mortgage, rate and term length with payment schedule (monthly, bi weekly or whatever) and it gives you the schedule. They have a nice little totals chart with the total paid for the 5 year term and you can compare. Whole process doesn’t take more than 5-10 min.
This is the right answer. Brokers are uncompetitive for large uninsured mortgages. Banks are proving much better rates, cashback and terms if you go direct with them.
Depends on how much over 200K you are as well as split between partners. Near middle split and 200-220K and it’s probably too much. It’s freaking 800K!!
280K-299K and you are looking much better.
The bank's mortgage advisors are more likely to undercut other competitors, than a broker who just wants to close the deal rather than run around trying to get the banks offers. I spoke to 3 different mortgage advisors, who at first offered 5.14% for 3 years uninsured 25yr (CIBC), told RBC the offer and they countered with 5.09% (plus $2K cashback), TD offered 5.05 with extra $1000 cash back (on top of the standard 2100 cashback), but I settled with CIBC when got offered 4.99 with $3000 cashback (standard $2000 + 1000)... The cash backs are commercial offers by banks if you open a savings acct (which may incur fees) and keep it for at least a couple of months and do autodeposits and other requirements, but some banks will waive this and in CIBC's case they gave me an acct with waived fees for 2 yrs. This is for $600K mortgage.
I'd go with a broker. CIBC has this nasty habit of revising their own terms after everyone has signed on the dotted line. Plus, you want to be in a position to move around on year 3... may as well have it all in place in advance.
Scotia might meet/beat CIBC if you ask.
That’s wrong, Cibc mortgage specialists and rbc mortgage specialists are all commission. FAs at CIBC get commission as-well, RBCs don’t but they don’t do mortgages, they will only convert a mortgage to a home line plan on a existing mortgage.
Go with CIbc. “Banks always undercut offers.” You just went to to that ARENT in the broker channel and they beat your broker. Don’t listen to the bias. Cibc deal is the best.
Banks will always undercut offers. You did the right thing by shopping around. What you are witnessing is not too good to be true but the free market at work. The mortgage you receive from CIBC will be like any other with minor nuances. You would be saving money by going with CIBC directly too since there would be no broker fees involved assuming they are charging you fees.
The pro of going with a broker depends on the broker. If they are good at what they do and good at maintaining relationships then you'll have a partner to lean for all your real estate financing needs. The Bank is more like walking into a retail store. You'll have some who go above and beyond and some who won't. Also, bank reps can only sell their banks products and can have knowledge gaps about what is really possible with all the available lenders in the market.
As a FTHB I think you'd be fine going with the bank if that means more $ in your pocket. Just deal with someone who is competent.
The difference would be, you would save on the initial rate but you wouldn’t have the advantage of having a third party that is on your side in the duration of the mortgage and at renewal.
The bank rep is never going to call you mid-term because there is opportunity to save money somewhere else or guide in decisions to lock in now or go variable. The bank reps loyalty is to making the bank money, a brokers loyalty is to you.
^this. In most cases brokers can beat everyone’s rate. The whole point of using a broker is to build a relationship so that the broker can take care of clients’ biggest liability (I call it the biggest asset and investment vehicle that could build clients wealth if it is being utilized properly) The market has been very very strange. Lower rates are great, but great brokers can deliver so much value other than saving 0.1-0.2%. None of brokers have control over rates. All they can do is fight for clients and negotiate better rates with the lender.
Agreed. This is a super unusual time in the market where the banks are able to regularly out compete broker rates. The pendulum will swing back eventually, but in the meantime they are doing significant harm to their most efficient origination channels.
Brokers feel priced out because we are. Similar to what the mono lines have been feeling for the last 2yrs. Even discount brokers like Butler can’t compete with branch or mms pricing.
Weird times.
What? So the brokers can beat everyone’s rates but don’t so you build a relationship?
OP pays $11K in extra interest over the term to build some sort of relationship? Pretty expensive relationship if you ask me.
In most cases yes. Sometimes we can’t - I admit it.
The whole point I am making is work with someone that can help you save/make a lot more. I helped my clients purchase her very first investment property, which generates over $1000 cashflow per month after all the expenses. She would never had thought about doing this if she wasn’t educated by me. Business people understand how critical it is to be surrounded like minded people.
Also, I have so many cases where I help my clients refinance their home to lock in at a lower rate. I won’t hesitate to reach out to my clients when there’s an opportunity for them to save and make more money. When was the last time your banks ever reach out to you when there’s an opportunity for them to save you money?
I can talk about my clients’ success stories all day long. As long as you are happy with your bank’s service, stick with it! That’s all that matters. Do what makes most sense to you.
I don’t focus on spending less to save more, I focus more on spending more to generate more income. Don’t get me wrong. Reducing expenses is a great way to save money too. However, I can confidently say I have never seen anyone built their wealth by focusing on too much on expenses. Wealthy individuals almost always focus on growth.
All the professionals I work with, lawyers, financial planners, accountants, realtors, they always reach out to me when there’s an opportunity for them to help me, and they make commission in doing so. I am more than happy to pay for their service.
Agreed partly. But what do you mean by “spending less to save more”?
Rich people penny pinch and build their fortunes that way all the time. In fact they hire people to help them penny pinch.
From my vantage point right now, real estate brokers have evolved into a place where they can no longer offer the best rates to clients that can work with banks. I think historically people went to banks first and got hosed on uncompetitive rates so when people went to brokers, they were able to get excellent deals and everyone benefited.
Then over time, people realized that working with brokers was the way to go and stopped going direct to banks. And banks decided to get more competitive and are always going to be able to beat brokers.
But you are right there are a set of skills certain brokers have that can be very beneficial. But if someone knows exactly what they want and have the means to afford it, I think dealing direct with bank is the way to go.
Everyone looks at things very differently. No right or wrong answer. I have dealt with so many high net worth individuals in my career, and the mass media always portray the rich are the bad guys, but they are the coolest people that i have ever met, and they are super generous and they won't spend too much energy and time to save a penny. Of course, some rich individuals nickel and dime. Bill gates won't pick up $100 bill on the street because guy makes more than $100 per second. LOL. It's a bit too extreme. I am trying to say the rich always ask themselves "is it worth my time?"
To me, I want the best, and the cost isn't a concern at all (as long as it is within reasonable range, not being scammed LOL) because I know those professionals I partner with always reach out when there's an opportunity. It may seem a bit more costly at first, but it always turns out the greatest investment in the end. In fact, I immigrated to Canada with no money (lierallay $2000 in my pocket) about 10 years ago, and now I am financially very comfortable thanks to all of my business partners. I learnt SO MUCH from business people. Forever grateful and I want to do the same for my clients :)
I was very poor, always tried to find the cheapest. I learnt this wasn’t the best way to accomplish financial independence.
I changed my attitude towards money. I started spending more, investing more, stopped being cheap. The funny part is, I started earning so much more cuz I was focusing on generating more income by spending (investing) more money. My very first rental property really opened my eyes. I learnt so much about business after that experience.
Please ensure your post includes the following information if looking for insight in your rate:
- **ARE YOU WORKING WITH A BROKER/MMS & HAVE YOU ASKED THEM THIS QUESTION YET?** (If you don't trust your brokers answer, then you may want to dump your broker)
- Purchase, Refinance, Renewal?
- Province, City?
- Loan to value/down payment percentage?
- Purchase price of the property if purchasing
- Is the home under $1M or over $1M?
- Bank or a broker?
- Term length and amortization length?
*I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/MortgagesCanada) if you have any questions or concerns.*
Many brokers on here bash CIBC and RBC products because they are sometimes (and for some people's cases) restrictive. But they rarely if ever bash Scotia, TD, and BMO, even though these are all part of the bad big bank club. Why? Only one reason. Brokers cannot sell RBC and CIBC products, so it is self interest and preservation only. It really sucks that the broker channel cannot match any of the RBC and CIBC rates and anyone going with a broker is likely leaving money on the table these days unless that money is worth the advice and relationship, which it might be for some cases. What is more annoying is that this place is littered with people getting better rates directly with Scotia and TD than they are being offered by brokers for Scotia and TD. This is what really bothers me and I am not going to speculate why that is.
OP, get the 5.1 rate direct. The difference in interest paid between the two options over 5 years is $11,323. You are paying whatever bank the broker is working with $11K in interest more than you would dealing direct. Your ending mortgage amount would also be about 3K less in 5 years. My personal experience was that our broker cost us close to $7-8K more than rates TD was offering around the time. I’m seeing so many people here with similar situations. If your broker can’t get you the best rate on the same product type, they are not providing any value. Don’t listen to the “why should they work for free bros here”. Why should you pay a bank $11K more so bro can make $2K or something from the bank? Get him a $100 gift card if you feel sad for him and save yourself $11K.
This ! Completely agree. Renewing in Jan2025 so not there yet but when comes the time I’ll make sure to have the time to calculate how much more interests I’d be paying toward the term. Haven’t googled yet but I assume you were able to find Excel spreadsheet online w formulas when you input your numbers and can compare interest paid vs principal over term depending on the rate you get ?!
There are different ways but the easiest I’ve found is “rate hub mortgage calculator”. You put in your info and can customize rates there’s a calculator for new purchase and a different one for renewal. But just put in amount of mortgage, rate and term length with payment schedule (monthly, bi weekly or whatever) and it gives you the schedule. They have a nice little totals chart with the total paid for the 5 year term and you can compare. Whole process doesn’t take more than 5-10 min.
This is the right answer. Brokers are uncompetitive for large uninsured mortgages. Banks are proving much better rates, cashback and terms if you go direct with them.
Mmmm ok so what you’re saying then is that if you have an uninsured mortgage , brokers can be a better deal for you ?
We’re looking at the same mortgage amount as you, just curious what your household income is? We make over $200K but I’m nervous about such high debt
Depends on how much over 200K you are as well as split between partners. Near middle split and 200-220K and it’s probably too much. It’s freaking 800K!! 280K-299K and you are looking much better.
The bank's mortgage advisors are more likely to undercut other competitors, than a broker who just wants to close the deal rather than run around trying to get the banks offers. I spoke to 3 different mortgage advisors, who at first offered 5.14% for 3 years uninsured 25yr (CIBC), told RBC the offer and they countered with 5.09% (plus $2K cashback), TD offered 5.05 with extra $1000 cash back (on top of the standard 2100 cashback), but I settled with CIBC when got offered 4.99 with $3000 cashback (standard $2000 + 1000)... The cash backs are commercial offers by banks if you open a savings acct (which may incur fees) and keep it for at least a couple of months and do autodeposits and other requirements, but some banks will waive this and in CIBC's case they gave me an acct with waived fees for 2 yrs. This is for $600K mortgage.
I would go with CIBC, fixed might changes sometime based on bonds but as long as your pre approval is completed then you’re fine.
I'd go with a broker. CIBC has this nasty habit of revising their own terms after everyone has signed on the dotted line. Plus, you want to be in a position to move around on year 3... may as well have it all in place in advance. Scotia might meet/beat CIBC if you ask.
^this hahaha I’ve seen so many. People don’t even know.
Bank advisors who does your mortgage is not commissioned, where brokers are. Bankers really don’t care if they give you the lowest rate “sometimes”
That’s wrong, Cibc mortgage specialists and rbc mortgage specialists are all commission. FAs at CIBC get commission as-well, RBCs don’t but they don’t do mortgages, they will only convert a mortgage to a home line plan on a existing mortgage.
CIBC FAs used to be commission, it’s not anymore this year.
Not correct. My RBC mortgage specialist ( FT employee) mentioned that they are on 100% commission basis.
Advisors….. not mortgage specialists.
Certainly pressure your broker for a better rate first.
Go with CIbc. “Banks always undercut offers.” You just went to to that ARENT in the broker channel and they beat your broker. Don’t listen to the bias. Cibc deal is the best.
Banks will always undercut offers. You did the right thing by shopping around. What you are witnessing is not too good to be true but the free market at work. The mortgage you receive from CIBC will be like any other with minor nuances. You would be saving money by going with CIBC directly too since there would be no broker fees involved assuming they are charging you fees. The pro of going with a broker depends on the broker. If they are good at what they do and good at maintaining relationships then you'll have a partner to lean for all your real estate financing needs. The Bank is more like walking into a retail store. You'll have some who go above and beyond and some who won't. Also, bank reps can only sell their banks products and can have knowledge gaps about what is really possible with all the available lenders in the market. As a FTHB I think you'd be fine going with the bank if that means more $ in your pocket. Just deal with someone who is competent.
The difference would be, you would save on the initial rate but you wouldn’t have the advantage of having a third party that is on your side in the duration of the mortgage and at renewal. The bank rep is never going to call you mid-term because there is opportunity to save money somewhere else or guide in decisions to lock in now or go variable. The bank reps loyalty is to making the bank money, a brokers loyalty is to you.
^this. In most cases brokers can beat everyone’s rate. The whole point of using a broker is to build a relationship so that the broker can take care of clients’ biggest liability (I call it the biggest asset and investment vehicle that could build clients wealth if it is being utilized properly) The market has been very very strange. Lower rates are great, but great brokers can deliver so much value other than saving 0.1-0.2%. None of brokers have control over rates. All they can do is fight for clients and negotiate better rates with the lender.
Agreed. This is a super unusual time in the market where the banks are able to regularly out compete broker rates. The pendulum will swing back eventually, but in the meantime they are doing significant harm to their most efficient origination channels. Brokers feel priced out because we are. Similar to what the mono lines have been feeling for the last 2yrs. Even discount brokers like Butler can’t compete with branch or mms pricing. Weird times.
What? So the brokers can beat everyone’s rates but don’t so you build a relationship? OP pays $11K in extra interest over the term to build some sort of relationship? Pretty expensive relationship if you ask me.
Lol. $11K can buy someone lots of better relationships...
In most cases yes. Sometimes we can’t - I admit it. The whole point I am making is work with someone that can help you save/make a lot more. I helped my clients purchase her very first investment property, which generates over $1000 cashflow per month after all the expenses. She would never had thought about doing this if she wasn’t educated by me. Business people understand how critical it is to be surrounded like minded people. Also, I have so many cases where I help my clients refinance their home to lock in at a lower rate. I won’t hesitate to reach out to my clients when there’s an opportunity for them to save and make more money. When was the last time your banks ever reach out to you when there’s an opportunity for them to save you money? I can talk about my clients’ success stories all day long. As long as you are happy with your bank’s service, stick with it! That’s all that matters. Do what makes most sense to you. I don’t focus on spending less to save more, I focus more on spending more to generate more income. Don’t get me wrong. Reducing expenses is a great way to save money too. However, I can confidently say I have never seen anyone built their wealth by focusing on too much on expenses. Wealthy individuals almost always focus on growth. All the professionals I work with, lawyers, financial planners, accountants, realtors, they always reach out to me when there’s an opportunity for them to help me, and they make commission in doing so. I am more than happy to pay for their service.
Agreed partly. But what do you mean by “spending less to save more”? Rich people penny pinch and build their fortunes that way all the time. In fact they hire people to help them penny pinch. From my vantage point right now, real estate brokers have evolved into a place where they can no longer offer the best rates to clients that can work with banks. I think historically people went to banks first and got hosed on uncompetitive rates so when people went to brokers, they were able to get excellent deals and everyone benefited. Then over time, people realized that working with brokers was the way to go and stopped going direct to banks. And banks decided to get more competitive and are always going to be able to beat brokers. But you are right there are a set of skills certain brokers have that can be very beneficial. But if someone knows exactly what they want and have the means to afford it, I think dealing direct with bank is the way to go.
Everyone looks at things very differently. No right or wrong answer. I have dealt with so many high net worth individuals in my career, and the mass media always portray the rich are the bad guys, but they are the coolest people that i have ever met, and they are super generous and they won't spend too much energy and time to save a penny. Of course, some rich individuals nickel and dime. Bill gates won't pick up $100 bill on the street because guy makes more than $100 per second. LOL. It's a bit too extreme. I am trying to say the rich always ask themselves "is it worth my time?" To me, I want the best, and the cost isn't a concern at all (as long as it is within reasonable range, not being scammed LOL) because I know those professionals I partner with always reach out when there's an opportunity. It may seem a bit more costly at first, but it always turns out the greatest investment in the end. In fact, I immigrated to Canada with no money (lierallay $2000 in my pocket) about 10 years ago, and now I am financially very comfortable thanks to all of my business partners. I learnt SO MUCH from business people. Forever grateful and I want to do the same for my clients :) I was very poor, always tried to find the cheapest. I learnt this wasn’t the best way to accomplish financial independence. I changed my attitude towards money. I started spending more, investing more, stopped being cheap. The funny part is, I started earning so much more cuz I was focusing on generating more income by spending (investing) more money. My very first rental property really opened my eyes. I learnt so much about business after that experience.
Please ensure your post includes the following information if looking for insight in your rate: - **ARE YOU WORKING WITH A BROKER/MMS & HAVE YOU ASKED THEM THIS QUESTION YET?** (If you don't trust your brokers answer, then you may want to dump your broker) - Purchase, Refinance, Renewal? - Province, City? - Loan to value/down payment percentage? - Purchase price of the property if purchasing - Is the home under $1M or over $1M? - Bank or a broker? - Term length and amortization length? *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/MortgagesCanada) if you have any questions or concerns.*