Globe and Mail ~ August 24th, 2022

Look online and you’ll see mortgage rates as low as 3.44 per cent for a five-year variable and 4.19 per cent for a five-year fixed.

Seems like a steal, right? Especially in a world where the best deals that our megabanks are advertising are 4.35 per cent to 5.17 per cent.

There’s just one problem. At least five out of six borrowers will never get a rate remotely near 3.44 per cent. They won’t qualify for it.
The rate mirage

Mortgage professionals know that rates like this are for well-qualified default-insured borrowers only. But your average Joe doesn’t.

Given the choice, mortgage providers wouldn’t advertise rates like 3.44 per cent. They don’t make enough money, relative to an average mortgage rate.

A select few do it for one simple reason. It’s good advertising that generates leads, lets the mortgage provider upsell and generates lots of mortgage volume, albeit low-margin volume.

If you’re out there mortgage shopping, however, you probably don’t want to get too excited when you see rates like these. That is, unless you meet all the rules below and don’t need a ton of handholding.

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