18 August 2010
The deal is that our major banks need to get a large spread between what they are paying their clients and what they get from homeowners for mortgages – it’s much more than the lender with 3 Year fixed rate of 2.90%. On August 11th, the Government of Canada benchmark bond yield for a 3 year rate was 1.70% meaning spread at 2.90% was 110bps – pretty healthy for a bank. How much do our chartered banks need? The problem is that chartered banks need to increase their profits for their investors and provide continuous growth with their stock prices. And yes, it’s all done using the Canadian homeowners’ money. Maybe it’s time to think about changes?
Besides the big five chartered banks, there are many other great mortgage lenders in Canada, who want to save you money. Just think about how your local banks treat you, how they make you pay for every single thing: every direct debit, ABM charge and other services. And mortgage brokers can get you great mortgage lenders who want you to save your hard earned money so you can pay off your mortgage even faster.
In other words, for every $100,000 you have, your local chartered bank will make you pay approx. an extra $500 or more every year, compared with great offer of 2,90%. And it’s just because the majority of Canadian homeowner’s let them do that or simply don’t know an alternative. So be wise and make a smart choice – use a professional mortgage broker!