If you are thinking of purchasing a home or locking in a low mortgage rate on a home you already own, you may already be doing research to find the lowest interest rate.
We always recommend doing lots of research when trying to obtain the lowest mortgage interest but always caution consumers when it comes to actually obtaining “pre-approvals” from multiple financial institutions.
Each time you apply for credit, it is reported to your credit report. You really should not make more than four credit applications in one calendar year. If you make too many applications for credit it could pull down your beacon score.
Canadian banks can be very sticky and require you to have a minimum credit score of 680, so if you want to get a mortgage and the best Canadian mortgage interest rates your credit score will have to be higher than that.
Some Trust Companies and Credit Unions offer CMHC high ratio mortgages for consumers who have a credit score of 620-680 but usually, these companies won’t offer discounted interest rates under these circumstances.
We always recommend that you consult a local mortgage broker if you are shopping for Canada’s best mortgage interest rates. They will be able to tell you what all the banks are offering and are also able to offer discounted rates with some banks. Also, if you don’t have a strong enough credit score they will be able to come up with other solutions for you.
If you are preparing to apply for a mortgage:
Do: Obtain a copy of your credit report with “FICO” score to see what it is there
Do: Start a relationship with a local mortgage broker
Do: Follow the Bank of Canada website to stay in the loop on rate announcements
Don’t: Go from bank to bank applying for mortgages to see what you can get. This could seriously damage your credit and ability to qualify for a mortgage at all.