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Why did my Co-Worker's Child get a Better Interest Rate Than I Did?

Conventional Mortgage Rates Red Deer

Why Did My Co-Worker’s Child Get a Better Interest Rate?
When you’re in need of a Red Deer mortgage, it’s natural to want to secure the very best rate. Your co-worker has been bragging about the ultra-low rate their son received on his first mortgage and you want the same. 
Of course you should get the best rate, right? After all, you’ve paid your mortgage on time for years and built up some good equity in your home. Unfortunately, that doesn’t guarantee you a rock-bottom rate.
In a weird twist of mortgage fate, those of us that have built up equity in our homes over many years, in order to avoid having to pay that lovely CMHC fee in the future, are being offered higher rates than first time home buyers with 5% down payment. Yes, that mortgage stress test we all hear about has reared its ugly head in an unexpected way. That being said, there are still some ways to ensure that you are securing the best mortgage rates available.
Knowing what factors determine your mortgage rate can help you better understand the process. The rate you’re offered is based on a number of considerations that are unique to you, including:
  • Loan Amount
  • Credit History & Score
  • Income
  • Down Payment
  • Debt-to-Income Ratio
  • Mortgage Type (ie, fixed vs variable)
  • Mortgage Term (eg, one-year, five-year, 10-year…)
To ensure you qualify for the best possible rate, it’s important to make yourself as attractive as possible in the eyes of lenders. Ensure that your credit score is high, save as much as possible for a down payment, reduce your existing debt and consider a variable-rate option.
And, although rate is important, your final mortgage decision shouldn’t be based on rate alone as there are many other equally important factors to consider. While lower rates generally signify lower payments, they can also translate to less flexibility. Pay special attention to prepayment privileges, penalties, portability and refinancing restrictions. 
Since rates also vary by lender. It’s always in your best interest to work with a professional mortgage broker as we negotiate on your behalf with different types of lenders (banks, trust companies, credit unions, etc) to ensure you obtain the best possible mortgage product and competitive rate catered to your unique needs. With so many options, professional advice is invaluable. 
Do you have questions about securing the best Red Deer mortgage product and rate? Answers are just a call or email away!


Brandi Pierik
Mortgage Broker
Dominion Lending Centres A Better Way

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