"Interest rates are prices, and sometimes you get what you pay for."

One of the questions that I get asked all the time, which stumps me a little bit more than you might think it should, is "what is your best mortgage rate?". Typically when people ask this question they mean what is the lowest rate that I have access to, and while it should be easy enough to answer, the truth is that this question represents a common yet fundamental misunderstanding about mortgages and interest rates.

Before you can buy a house, you need to make sure you can afford it and that there will be financing options available to you. This is where a pre-approval comes in. As mortgage lending criteria has become more strict over the years, the pre-approval and the increased certainty and confidence that goes with it has become an essential first step for the would-be-home-buyer.

Real estate transactions are complex; there's no doubt about it. With the number of moving parts and the drawn out timeline, buying a house is one of the more complicated transactions the average person will undertake in a lifetime. Luckily, you don't have to go it alone. Throughout the home buying process, a team of real estate professionals will support and guide you along the way. Like Frodo on his quest to deliver Sauron's ring to the fires of Mount Doom, a dependable team of trusty sidekicks will get you where you need to be.

My phone rings, chat bubble bubbles, or my email dings ... "what's your best interest rate?" asks the caller. I scratch my head, as at this point I know nothing about my caller, the property or their needs. This article's aim is to shine a light on this question from the mortgage-lending side of the fence and delve into what it takes for a mortgage professional to be able to accurately answer your question.

Updated by Chris Richards on Jan 21, 2021 

As a licensed mortgage broker, the question often gets asked what do we do, and how are we different from a bank.

In this blog, I am going to briefly talk about being a mortgage broker in Alberta, however most lenders in Canada have a national focus, so arranging a mortgage in Edmonton or Calgary is the same process and the same rules as working with a borrower in Toronto, Vancouver or Halifax as examples. Happy to help, wherever you are!

1. What is a Mortgage Broker?

In a nutshell, they are independent, trained specialists licensed to represent and provide you with the best advice for your home or property financing needs. 

They are retained by the client to shop the mortgage market (including banks, trust companies and other financial institutions) and to provide independent advice in choosing a mortgage commitment to fit the client’s particular needs.

It is a similar service as that of an insurance broker or travel agent in that the professional is highly trained within a very complex industry.

• Often they can obtain home loan commitments with better terms, options and interest rates than the client can obtain on their own;
• Saves you considerable time and effort; and
• Potentially save thousands of dollars over the term of a mortgage.

The mortgage broker is typically paid a fee by the lender upon successful funding (no charge to client). If the broker intends to charge you a fee, as would be the case in commercial, agricultural, business and non-bank (private) lending, this must be disclosed up front to the client.