Market Research Canada (MRC), has conducted a study of mortgage rates available to Canadian homeowners, for the entire one-year period of September 8, 2010 to September 27, 2011. In this study, the second of its kind performed by MRC, the entire Canadian mortgage lending market was reviewed in detail. The websites of 9 major Canadian lenders were monitored weekly, to identify each firm’s ‘best’, or lowest rates offered, for each of the three most commonly popular mortgage types and terms - fixed rate mortgages for both 3 and 5 year terms, and variable rate mortgages for 5 year terms.

 

Results

The results clearly show that for each of the mortgage types and terms studied, homeowners selecting MortgageFlex as their lender were consistently able to take advantage of mortgage rates which were better than the published rates of any of the major lenders reviewed. Canadian homeowners choosing to borrow through MortgageFlex during the year, incurred lower interest costs than they would have with any of the other lenders reviewed. Based on our findings during this study, Market Research Canada continues to believe that rates offered by MortgageFlex are consistently lower than the best lowest discounted rates offered publicly by any major Canadian mortgage lender.

 

For the period, the average of the MortgageFlex rates offered were as follows:

3 year fixed-rate = 3.17 %

5 year fixed-rate = 3.51 %

5 year variable = ARM Prime -0.86%

 

The average of the best discounted rates offered by the remaining major Canadian mortgage providers during the period were as follows:

3 year fixed-rate = 4.10%

5 year fixed-rate = 4.07%

5 year variable = ARM Prime -0.23%

 

Thus, Market Research Canada confirms that there was a rate differential between MortgageFlex and the average best discounted rate published by the Canadian mortgage lenders studied for the period under review as follows:

3 year fixed-rate = 0.93% savings

5 year fixed-rate = 0.56% savings

5 year variable = 0.63% savings

 

 

Our Opinion

Market Research Canada finds that the rate differentials found throughout the study are not insignificant. The study shows that borrowers would incur the lowest amount of interest expense possible, by arranging their financing through MortgageFlex, versus establishing mortgage borrowings with any of the other Canadian lenders reviewed at their best discounted rates for the mortgage instruments reviewed.

 

Using an example of a $350,000 mortgage amortized over 35 years, the savings that would be realized by choosing MortgageFlex, calculated over the respective 3 or 5 year term of the mortgage selected, are as follows:

 

 

 

 

Thus a mortgage borrower would save more than $9,500 in interest costs by selecting MortgageFlex over the best discounted rates offered by competing lenders for a fixed term, either 3 or 5 years, and more than $10,500 by selecting MortgageFlex for a variable rate 5 year term.

 

Details

All of the following major Canadian mortgage lenders were included in this study, using the best, or lowest, identified mortgage rates published on their websites. Care was taken during the review to make sure that any special rates advertised on their sites, and all discounts described as available were taken into consideration to ensure that each institution’s very best discounted rate published was used in all instances.

 

Royal Bank of Canada

CIBC

Scotiabank

TD Canada Trust

Bank of Montreal

ATB Financial

Servus Credit Union

PC Financial

MortgageFlex

 

The following table shows the actual calculated average of the best individual discounted rates offered each week for each relevant instrument.

Best Discounted Rates Average for Period (September 8, 2010 – September 7, 2010) Canadian Mortgage Lenders
Lender	3 yr fixed	5 yr fixed	5 yr variable
Royal Bank of Canada	4.27%	4.15%	ARM Prime – 0.17%
CIBC	3.46%	4.16%	ARM Prime – 0.14%
Scotiabank	4.37%	4.16%	ARM Prime – 0.23%
TD Canada Trust	4.31%	4.15%	ARM Prime – 0.11%
Bank of Montreal	4.26%	3.92%	ARM Prime – 0.14%
ATB Financial	4.26%	4.10%	ARM Prime – 0.40%
Servus Credit Union	4.29%	4.11%	ARM Prime – 0.0%
PC Financial	3.55%	3.80%	ARM Prime – 0.66%
Average of 8 Major Lenders	4.10%	4.07%	ARM Prime – 0.23%
MortgageFlex	3.17%	3.51%	ARM Prime – 0.86%
Difference	-0.93%	-0.56%	-0.63%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Market Research Canada is an independent market research and consulting firm which has been in operation more than 6 years, and is located in Kitchener, Ontario. Questions about this report may be addressed to Warren Gray, President wg@marketresearchcanada.com .