Did you know that mortgage rates are sold at a premium? Simply put, all brokers and bank mortgage specialists have wiggle room when it comes to the mortgage rates they offer you.
For the same mortgage product from any institution, there are usually 3 types of rates :
- A floor rate: the absolute minimum rate the bank is able to offer a given client.
- A middle rate: the rate you will likely be offered first – not great, not too bad either. Brokers and mortgage specialists will usually offer this first, and hope that you accept it without much thought.
- A high rate: this is what is posted on bank websites. They will never offer you this rate, but it’s the one they will use against you to calculate your penalty if you happen to break your mortgage.
In order to offer you the floor rate, a broker or mortgage specialist would have to give away a portion, or all of, their commission. Few are willing to go there… Hence why you normally have to go bank-to-bank, broker-to-broker to finally get to the floor rate.
At nesto, we believe in offering you the floor rate from the start. It’s the most important purchase of your life, why should you have to pay a premium for it?
Yes, nesto makes less than the average broker or mortgage specialist, but we also get the peace of mind knowing that we helped you save thousands of dollars on your mortgage. We feel pretty good about this 🙂