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Not asking this mortgage question could cost you thousands Add to ...

Want a mortgage rate lower than those advertised by lenders? Ask and you shall receive.

In a Globe and Mail survey of more than 300 mortgage holders, 82 per cent said they were able to get a rate better than the lender's official posted number when they last negotiated their mortgages.

Of the survey respondents with five-year fixed-rate mortgages, interest rates varied widely, and those who haggled for a rate lower than what their lenders advertised paid less overall. Among the group that bargained with their lenders, 45 per cent said their interest rates were 3 per cent or less, compared to 32 per cent of those who did not try to get a deal. Similarly, only 5 per cent of the hagglers were paying more than 4-per-cent interest, compared to 16 per cent of the group that didn't dicker. 

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It's definitely worthwhile to negotiate, says Sarah Yu, who bought a house in Vancouver last year. She wrangled a three-year fixed-rate mortgage at 2.79 per cent. "It wasn't tough to negotiate at all. It was just nerve-wracking as it was my first time purchasing a home," she said.

Dana Brown got a two-year fixed rate of 2.49 per cent when she negotiated the mortgage on her Ottawa home in October, 2011. "I believe the posted rate at the time was 3.99 per cent," she said.

Not asking for a lower mortgage rate can cost you thousands of dollars over time, says Penelope Graham, a spokeswoman for RateSupermarket.ca.

She uses the example of a five-year fixed-rate mortgage with a 5-per-cent interest rate to illustrate her point: "Using the CMHC national average resale price of $363,740 as an example, and a 25-year amortization, you’re looking at a monthly payment of $2,116. Compared with 2.77 per cent, the lowest five-year fixed offered on the market today, that’s a difference of $437 in monthly payments. This will add up to $5,244 a year, and $131,000 saved over your entire amortization."

Even if you only manage to skim a little bit off your mortgage rate, it makes a big difference, Ms. Graham says. "If this same client negotiated down 20 basis points, to 4.80 per cent, they’ll save $505 each year, and $12,600 over 25 years."

Selena Kwok of Victoria said it was no problem getting a lower rate on her five-year fixed-rate mortgage in August, 2012. "At that time we were worried that we would not be able to hold onto the 2.99-per-cent rate because banks had stopped offering that rate and interest rates were supposedly going to rise.  But we were able to easily get our bank to extend that rate for us."

Want to share your own experience negotiating a lower mortgage rate? Add it to the comments.

Follow Dianne Nice on Twitter @diannenice

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