It seems like when it comes to mortgages, Canadians prioritise saving money with lower interest rates, with around 63% saying they are willing to ditch traditional mortgage advice for a cheaper rate, according to a new survey.
A poll by Rates.ca showed that while 72% of Canadians get mortgage advice in person, many borrowers say they would be happy to apply for a mortgage without talking to people on the phone or in person if it meant getting a lower interest rate.
In fact, 45% said they would consider a fully online mortgage if it they could get an interest rate that is 0.05 or 0.20 percentage points lower. A 0.20 percentage point reduction in mortgage rate could save Canadians about $195 a year per $100,000.
"Just as we saw with online stock brokerages a few decades ago, a growing segment of borrowers is willing to make their own mortgage decisions online without a banker's advice," said Rob McLister, market watcher at Rates.ca.
Getting the best rate is a primary concern for many Canadians, with three in four saying so. Furthermore, roughly 47% said their number one mortgage goal is to get the lowest rate.
The study also found that only 19% of Canadians have the primary goal of achieving lower overall borrowing costs.
"The lowest total borrowing cost, which includes interest, fees and penalties, always matters more than the lowest rate. But people continue to mistakenly associate the lowest rate with the greatest savings," McLister said.
McLister said Canadians need to understand that achieving lower mortgage costs is more crucial than just getting a lower interest rate.