Transparency is important when researching a mortgage and most certainly when dealing with your mortgage lender.
You may have heard a recent ad from RBC comparing their mortgage product to a competitor's. The marketing team at RBC has missed the mark in helping consumers trust their bank. Trust is such an important aspect of a financial transaction and that trust is diminished because of a mistruth. The big question is the average mortgage consumer aware of their mistruth? We want to ensure that when dealing with a professional, you get the truth. Here is the real story.
What is RBC really comparing?
A bank's prime rate usually only changes in response to a change made in the Bank of Canada's overnight target rate. This is the rate that is also used for Variable Rate Mortgages. The RBC Royal Bank prime rate is currently 3.95%, which is the same prime rate that is posted by most financial institutions in Canada. We know their ads are targeting TD because TD is the only bank with a prime rate higher than the rest at 4.10%. What you are not being told, however, is that on a TD Variable Rate Mortgage the rate is further discounted by 0.15% making it the same net rate as RBC's:
RBC = Prime (3.95%) - 0.65% (discount to prime rate) = 3.30%
TD = Prime (4.10%) - 0.80% (discount to prime rate) = 3.30%
If you are looking for a Variable Rate Mortgage that is lower than the above rates, there are other lenders with rates at Prime (3.95%) - 1.00% = 2.95%.
The point here is that with this whole RBC campaign to uncover an unknown are they really being that crystal clear with comparing these 2 products? No, they are not. In a time where banks are making billions of dollars a quarter, ask yourself if they really have your best interest at heart? Working with a trusted mortgage professional can help you navigate through all of this doubt created in the industry and show you the real picture to help you get into the best mortgage suited for you.
Interested in finding out more about your home financing options? Give One Link Mortgage & Financial a call today at (204) 928-7722.