Ask Ozzie JurockNo Comments

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Q: There seems to be a wide variety of mortgage rates offered. My bank offered me a 5 year term rate for 4.9 per cent, but I see them advertised as low as three per cent. What gives?

A: Generally speaking, the short term rates (one-, two-and three-year mortgages) are tied to the prime rate, which currently is three per cent.

However, that rate is not fixed and if the prime rises, so will your mortgage rate. Your rate for a five year term mortgage is fixed and it is always a little higher, but it will also not rise for five years.

The three-per-cent rate you saw was likely a short term rate (not fixed). Now for the tricky part . all rates are negotiable! The rate you see advertised in the bank window for a five-year mortgage this week stands at 5.25 per cent -or so. Your offer of 4.9 per cent is better, but still very high. (The best five-year rate this week is between 3.5 – 3.8 per cent.)

The short-term rate (not fixed) is .5 per cent below the prime.

The very, very best is as low as 2.2 per cent this week for a five-year variable closed.

How do you get the very best rate? You have excellent credit, and can close fast. If you just had your car repossessed … you pay 5.25 per cent (or more).

Go to your bank and get your best rate – in writing by way of a pre-approval. Then compare.

Find the best rate at www.jurock.com – or elsewhere. Walk, if you are not offered it.

The same applies for mortgage renewal. Check the rate. Often your current bank offers renewals to existing customers at a higher rate than they do to new customers.

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