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September 12, 2019 Kristen Godel

Don’t Be Loyal to the Big Six (Banks)

It’s no secret that the “Big Six” banks are juggernauts in the mortgage and real estate sector. But does this mean that they are the best place to get a mortgage? It must be, since they own majority of the space, right? Wrong!

From our experiences, most clients seem to approach brokerages as a back-up plan. The initial instinct for those in need of any form of financial assistance or “borrowing” is to approach their local bank. This is usually a default behavior ingrained in them, over the years of banking with their institution of choice. There is a sense of loyalty, safety and trust that exists within us all, when dealing with our primary banks. With these notions, we tend to also believe that they are the best place to get a loan of any kind, especially a mortgage (the biggest investment most people will ever make throughout their lives).

Banks tend to indirectly abuse this authority by offering less than ideal mortgage products and rates, as compared to smaller mortgage financing institutions (and when we use the term ‘smaller’, we in no way, shape or form mean ‘insignificant.’) The big six banks are more than aware of the pre-existing notions held by most people to also know that, with this blind trust and loyalty, they do not need to offer the best mortgage rates and products. Afterall, why “sweeten the deal”, when it’s not necessary? More money in their pocket… That doesn’t seem fair, does it?

Luckily, there are many Alternative-A banks that exist who tend to offer more competitive mortgage rates and products. Although equally safe as the major banks, these alternative banks may be lesser known and trusted by the general public. In order to attract borrowers from the bank, they offer lower rates, in hopes of capturing some of the market share that is dominated by the big six. Once borrowers have an established experience with these alternative lenders, they come to realize the same notions of loyalty, security and trust as they would with any other bank. This experience then leads to the openness of finding other options during a mortgage renewal/maturity to ensure that you are getting the best possible mortgage at any given time. This further leads to potential savings over the lifetime of the mortgage.

So, although it may be tempting to visit your local branch to obtain a mortgage approval, give us a call today so we can find you the best and most competitive mortgage options possible.

For more information, don’t hesitate to reach out to us today! (905) 455-5005.