When buying a home in Vancouver, choosing between a bank and a mortgage broker can make a significant difference in your long-term costs. Both options have their advantages, but knowing how each works can help you save thousands.
The Basics: Bank or Broker?
A bank offers its own mortgage products directly to customers. You’re limited to the rates and terms they provide, even if you negotiate.
A mortgage broker, however, works with multiple lenders, including banks, credit unions, and private lenders, to find the best rate and terms for your situation. They compare rates across the market, potentially offering you better deals than what just a bank can.
Interest Rates: How You Save
Banks typically have set rates, with little room for negotiation. A broker, on the other hand, can access a wide range of lenders, giving them flexibility to secure lower rates. Even a 0.2% difference in interest can save you tens of thousands of dollars over a 25-year amortization.
More Options and Flexibility
If you don’t fit the standard bank profile—whether you’re self-employed or have a low credit score—a broker can connect you with alternative lenders. This can open up financing options that a bank might not offer.
Fees: What’s the Cost?
Contrary to popular belief, working with a mortgage broker is often free for the buyer. Brokers are usually paid a commission by the lender, while banks may not offer the same competitive rates or flexible terms. The key difference? Long-term savings from a lower rate or more favourable mortgage terms.
Which Saves You More?
If you have excellent credit, your bank might offer decent rates. But for most buyers, especially those with complex needs, a mortgage broker can provide access to better deals, potentially saving you thousands over the life of your mortgage.
Conclusion
In Vancouver’s competitive housing market, working with a mortgage broker can often save you more than relying on a bank alone. By comparing rates from multiple lenders, brokers can secure lower rates and better terms, helping you make the most of your home purchase.
Contact Arise Mortgage
Want to know how much you can save? Let’s talk! Reach out to us today for a free consultation, and let’s explore your mortgage options. Together, we’ll find the best path to your dream home!
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