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Shannon Lee Simmons is a Toronto financial planner and founder of her own firm, New School of Finance.Tim Fraser/The Globe and Mail

Shannon Lee Simmons knows that when the time comes for her to buy a house, she also needs to be ready to negotiate a good mortgage.

"The first thing you need to do is research. You need to see what's out there before you just settle on one lender," says Ms. Simmons, a Toronto financial planner and founder of her own firm, New School of Finance.

Ms. Simmons says she was looking to buy a Toronto home last year but has dropped out of the market temporarily, because she thinks prices are too high right now. When she starts looking again, she won't approach any mortgage lenders until she is well researched again. "You want to know all of your options beforehand if you're going to negotiate," she says.

This might require a bit of deep breathing as well as planning, says Toronto mortgage broker James Robinson.

"It can be a David vs. Goliath situation, except that sometimes David doesn't realize that he's David [the little person with the slingshot] and thinks that Goliath is a friend," says Mr. Robinson, owner of Dominion Lending Centres Mortgage Watch.

Experts agree that preparing to negotiate a mortgage involves a combination of factors – knowledge about how mortgages work, understanding the current market, some professional help and, at the right moment, good negotiating skills.

Getting information on rates might be the easiest part, says Jeff Brown, formerly vice-president at Meridian Credit Union in Toronto.

"There's an incredible ability nowadays to do research online," he says. Online aggregators such as, or can put comparisons onto your screen instantly.

Rates are more negotiable today than they were 10 or 15 years ago, says Sami El-Farram, a mortgage broker at Total Mortgage Source 360 in St. Catharines, Ont.

"Back then you were nervous. You went to the bank and wore your best clothes and you would try to portray yourself as the perfect citizen. Nowadays you're going to find that most lenders are simply happy to have the business, because it's more competitive now," he says.

Some lenders say it can be helpful to use the services of a mortgage broker.

"They can negotiate on your behalf. They have access to a wide range of lenders and they can negotiate to get you the best rate," explains Mr. Brown.

Don't shy away from playing the loyalty card if it's available, too, Mr. Brown adds. Bank or credit union customers who already have accounts, credit cards, car loans or personal loans at an institution can often get a break.

"Tied selling [locking customers in to additional services] is not allowed but it can be good if there's already an existing relationship with a customer," he says. It's also good to show up to a negotiation with a co-borrower; sometimes a couple can get a better rate than a single person, depending on the circumstances.

"Although rate is obviously important, it's not necessarily the most important thing that consumers should be focusing on when shopping for a mortgage," says April Dunn, mortgage broker and owner of Red Door Mortgage Group Mortgage Architects in Kelowna, B.C.

"I try to educate my clients so they also understand the terms, conditions and restrictions of the mortgage they are considering," she explains.

"Does the mortgage have prepayment restrictions? How is the penalty calculated should they need to break the mortgage early? What rate is the lender going to offer at renewal time? Does it meet the borrower's short-term and long-term goals?"

Borrowers shouldn't be afraid to try to negotiate a better rate than the posted figure. "If you don't ask you won't find out. The worst they can do is say no," Mr. El-Farram says.

While a flat "no" sometimes does happen, there is usually a bit of wiggle room in posted rates, particularly for long-standing customers with banks or borrowers who have already held a previous mortgage.

Negotiating tips suggests considering the following guidelines when negotiating:

Ask the lender whether the rate it's quoting is the "absolute" lowest they can offer. If it is, you have reached the limit for this particular negotiation; if the lender hesitates, say you want to think about it and get back to them.

Calculate how much your own time is worth. "Spending an hour to save 10 basis points off your rate is worth it. That amounts to roughly $470 less interest over five years, for every $100,000 of mortgage (given a 25-year amortization)," says. Calling every broker within 500 kilometres to save one basis point is a waste of time.

Most importantly, make sure you know what kinds of conditions come with your mortgage, regardless of the rate. You don't want to approach a negotiation like a lamb, but you don't want to outfox yourself either.

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