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Best Bank In Canada To Get A Mortgage | Part 1 - YouTube
Channel: Nolan Matthias
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hey it's nolan this is 360 and today
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we're discussing
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where is the best bank in canada to get
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a mortgage and what we're going to do is
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we're going to run through we're going
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to compare all the banks we're going to
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tell you the one little trick that every
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single one of them has because they all
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have at least one
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and at the end we're going to get to our
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very favorite bank and the one that we
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think is
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the best choice for most consumers in
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canada to get their mortgage
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but before we get into it do me that
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favor hit the subscribe button hit that
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notification bell and please
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for the youtube algorithm so more people
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can see this video
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please hit that like button okay so
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let's talk about banks real quickly
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they all do certain things well i mean
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if you want great commercial banking or
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you want wealth management
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rbc is the place to go if you want the
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best online trading platform for
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self investing then bmo's the place to
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go
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and if you want a free ipod and a comfy
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couch and
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the best technology in the industry then
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td is your place to go
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and if you're like me and you have a
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parent who was a banker for the 47 years
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of her life
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you make sure that you go to whatever
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bank your mother doesn't work at
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so that she can't see where you're
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spending your money on the weekends
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my wife and i personally we have bank
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accounts spread over all the different
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banks we have them at we have them
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at
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td we have them at rbc and we have them
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at scotiabank because
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all of those banks do different things
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well and we pick and choose the products
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that we want for me
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based on what that individual bank does
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well but how do we define the best bank
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for your mortgage
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well it's really simple we want to
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choose the bank that has the least
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overall cost
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over the life of your mortgage and the
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one with the most flexibility right
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you want the bank that's going to cost
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you the least amount of money and there
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are some banks that will cost you more
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money
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even if the interest rates are exactly
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the same and that's what we're going to
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examine today
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is which bank is the one that makes the
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most sense for you you might be
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surprised that you don't want to pick
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your bank based on the lowest rate and
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we'll talk about why when we get to the
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portion of this conversation but
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more than just
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cost we need a criteria to figure out
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which one of the banks is going to be
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the best option
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and here's how we suggest that we're
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going to do that we're going to look at
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their prepayment privileges
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because what we find is the banks with
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the best prepayment privileges have the
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best overall mortgage
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and the best prepayment privileges mean
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you can pay off the mortgage the fastest
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which means that you pay the least
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amount of interest over time
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and what we found is that the greater
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the greed factor the worse the bank is
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for a mortgage
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and the lower the greed factor the
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better the bank is for a mortgage
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and how we're going to rank these is
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based on how quickly they will let you
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pay out your mortgage and therefore
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the faster a lender will let you pay out
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your mortgage the lower the greed factor
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which makes for a better lender for a
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mortgage so
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let's get into this and what we're going
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to do is we're going to rank them from
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worst to best finishing with the best
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place to get a mortgage in canada in our
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opinion so let's start with rbc
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there's a clear reason why we think rbc
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is the worst lender to get a mortgage
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out in canada and that's because their
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prepayment privileges are the worst
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they're the only bank in canada that
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will only allow you to pay 10
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of your mortgage and lump sum payments
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every year without penalty
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everyone else has higher prepayment
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privilege now here's the interesting
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part
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is rbc clients are the most loyal
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clients in the industry
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for whatever reason maybe it's the
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connotation of it being
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the royal bank of canada they don't want
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to leave and all they want to do is get
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their mortgage at rv's okay now slightly
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better is
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has great mortgages and they've got
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low featured mortgages and you have to
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know which one you're getting when
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you're getting a mortgage from this
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particular bank
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they have what's called their smart
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mortgage which is their no frills
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mortgage
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we've talked a lot about no frills in
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other videos we'll link them up here
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they've also got their normal mortgage
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which is for all intents and purposes an
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awesome mortgage it has 20
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prepayment privileges and often comes
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with what's called
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a mortgage cash account which means that
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if you pay your mortgage in advance
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and you need to get the money back out
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you're allowed to do that they're one of
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the few lenders in the industry that
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does this
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it's an awesome feature that typically
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only comes with a mortgage
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but that being said most people are rate
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driven
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and as a result they're choosing the
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most smart mortgage and smart
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mortgage is really only smart
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for because it comes with a few
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things that
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aren't in the best interest of the
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consumer one it's got prepayment
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privileges
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similar to rbc's 10 percent it's
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also got what's called a bona fide sale
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clause which is essentially a no
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refinance clause or no
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leave and go to a different lender
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clause and what that means is that
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you're stuck with until such time as
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you sell the property
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or the end of the term comes up so if
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you get offered a better rate elsewhere
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if you want to refinance and you don't
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qualify at and you want to go
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elsewhere too bad because you've got
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their smart mortgage
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you're pretty much stuck with them so
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that's their little trick and you've got
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to watch out for that when you're
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dealing with
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now moving on to cibc cibc depending on
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the product you get has different
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prepayment privileges
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it can be 10 15 20
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depending on what you get and what
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you've negotiated now similar to
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the lowest prepayment privileges often
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come with the product that is the least
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flexible
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the highest ones with the product that
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is the most flexible but in order to get
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that higher prepayment privilege you
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have to pay
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a higher rate in most cases now you'll
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notice that when we get to cibc they
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have what's called a 100
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increase your payment option now this is
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an interesting option because what it
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means is that if you want to increase
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your payment
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by up to double the original payment
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amount you can do that which is really
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cool because let's say you're paying a
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thousand dollars a month and you decide
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hey now i can i
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can afford to pay fifteen hundred
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dollars a month you can increase it by
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fifty percent to fifteen hundred dollars
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or by
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if you wanted to a hundred percent to
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two thousand dollars
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and they will allow you to do this now
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often they'll let you pull it back if
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you want to
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but there are privileges similar to this
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that are better
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than increasing your payments by a
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hundred percent and we'll get to those
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when we start talking about scotiabank
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okay so cibc's little trick is this the
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cashback
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they love the cashback and here's why so
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what they'll do is upon closing they
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will say okay we're going to give you a
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five thousand dollar cashback for
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example
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and let's say in year three of your five
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year term you decide that you want out
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of your mortgage you either want to
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leave to go to a different lender or
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you've sold the property
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well cibc is going to make you pay back
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that five thousand dollars
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in its entirety in fact if you pay off
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the mortgage
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a day before your term ends they will
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still expect you to pay back the whole
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five thousand dollars even though you've
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paid them
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five years worth of interest on that
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mortgage we've had this happen with
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clients where
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we request a payout statement a month
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early and cibc comes back and says okay
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well you owe us
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the mortgage plus the penalty plus this
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five thousand dollars we gave them
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now if they were to pay out the mortgage
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on the renewal date
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they wouldn't have to pay the five
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thousand dollars back now most banks do
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cashbacks but they will only
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make you pay back the amount that's
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relative to the amount of time you have
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left on the mortgage so let's say
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you get a five thousand dollar cash back
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and you had two years left on the
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mortgage
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they're only going to make you pay back
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2 000 not the whole
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5 000 but cibc is a little bit different
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they use this as a retention strategy
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it works well because that five thousand
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dollar cashback is usually long gone by
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the time they come back
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asking for it because you want out of
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your mortgage so you know cash is free
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only if you end up having your mortgage
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to the end of the term with crbc so
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let's move on to td now
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td's got very similar prepayment
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privileges again to
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cibc they have the increase your payment
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by up to 100 percent
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they have 15 lump sum prepayment
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privileges on all of their mortgages so
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you can pay up to 15 per year without
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penalty
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this is a great lender they have a lot
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of great features they have a lot of
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great products
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they're new to canada product is second
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to none uh
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absolutely phenomenal lender we love
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them to death the one thing you have to
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watch out for
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their little trick is you have to watch
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out
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for their collateral charge so what td
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likes to do
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is they like to register you their
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mortgage for up to 125 percent of the
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value of your property
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which is way more than what you actually
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borrowed they're the only lender
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in canada that we know of that does this
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and what that means is that if you ever
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want to get a second mortgage or you
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ever want to get a line of credit with a
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different bank
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you can't do that you're pretty much
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stuck with td because because they've
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said
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hey nobody else can lend against this
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property except for us
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so something to watch out for with them
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we don't love that about them but
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that's not a super super big issue but
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it's just something that's different
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from the other lenders so
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something to watch out for there again
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td great technology great online user
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interfaces
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free ipods free tvs like they are the
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lender that is most millennial friendly
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in my mind or bank that's most
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millennial friendly in my mind
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but we don't think they're the absolute
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best bank to get a mortgage out in
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canada so
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we've gone through four of the five
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major banks in canada who's left
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who's the best bank to get a mortgage
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out in canada well
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it's scotiabank here's why so scotia
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bank
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is by far the leading lender when it
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comes to
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paying your mortgage off quicker in fact
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they are the number one lender when it
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comes
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to being able to pay the least amount of
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interest over the term of your mortgage
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why because their prepayment privileges
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are awesome their standard mortgage
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comes with a fifteen percent prepayment
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privilege
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which means you can make lump sum
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payments up to fifteen percent per year
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and if you negotiate with them they'll
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increase this to twenty percent they've
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also got the ability
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to increase your payment by 15
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per year now you may be thinking well td
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and cibc will allow you to increase it
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by a hundred percent
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yes well let me get there fifteen
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percent is the amount that you can set
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your payment higher than it was
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in the year before but they've also got
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another feature and that's called a
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double up payment
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what the double up payment allows you to
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do is double any payment you would like
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so if throughout the course of the year
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you want to double up every single
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payment
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you can do that and you've increased
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your payment by a hundred percent plus
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you can use your fifteen percent
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increase to increase it by basically a
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hundred and fifteen percent
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which makes it the best increase payment
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option
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in the industry the other thing that you
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can do is you can decide not to increase
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every single payment you can decide you
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just want to double the payments that
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you want to
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and what that means is that you can turn
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on the double up and you can turn it off
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and you can do this payment or next
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payment
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or the one three months from now but you
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don't have to do them all
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with the 100 increase your payment
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options that cibc and td canada
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trust have once you've set your payment
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to that amount you pretty much have to
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leave it there you can't fluctuate up
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and down
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as you feel now the other really great
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thing that we love about scotiabank is
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let's say you
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use your double up payment option well
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you can also choose to miss a payment
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down the road
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which is absolutely awesome because
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let's say you get a little bit too
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aggressive paying down your mortgage
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and you've doubled up and doubled up and
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double up and you decide hey
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we want to take a break completely from
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our mortgage payments you can do that
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with scotiabank we absolutely love it
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now we did mention every single bank has
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a trick what is scotiabanks well
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when they port a mortgage they do
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something that's a little bit tricky
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what they do is they keep your original
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mortgage
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and if you borrow any new funds they
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start a new
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second mortgage so you end up with two
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mortgages on
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the new property that you're buying and
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what that means is if you don't get the
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maturity dates to line up you could end
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up with
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a mortgage that you know renews in 2021
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and then the second portion renews in
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2023
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and because they were new at different
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times you're always stuck with a penalty
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on one of the two mortgages so
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the trick to scotia's trick is to make
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sure that when you borrow new funds
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you always get the new mortgages
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maturity date to line up with the other
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mortgage
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so if you've got two years left on your
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mortgage reporting you're borrowing new
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money
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the new money you want to get on a
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two-year mortgage instead of a five-year
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mortgage
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so that they both come up for renewal at
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the same time and you can ultimately end
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up having them merged into one mortgage
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so you can avoid being forced into a
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penalty if you decide to make a change
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down the road
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so at the end of the day in our minds
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the choice is clear when it comes to
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getting a mortgage at a bank
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scotiabank is the clear winner there is
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nobody better
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now are there other lenders that have
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better products better features
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maybe we'll discuss that in our next
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video but for the most part if you're
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going to get a mortgage from a bank and
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you insist on getting it from a bank not
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necessarily a
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lender that specializes in just
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mortgages which has a lot of merit to it
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by the way
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but if you insist on getting your
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mortgage from the bank scotiabank is by
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far the place to get your mortgage
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td is a close second everyone else you
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know what
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they're all good lenders they're all
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good banks they all have great things
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that they do really really well
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but none of them compare to scotiabank
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when it comes to getting a mortgage
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so if you found this information useful
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if you liked what you saw please
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hit that subscribe button hit the
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notification bell and hit that like
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button for the youtube algorithm
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and most importantly if you're
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subscribed you're going to get to see
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that next video where we talk about
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non-bank lenders and perhaps we have a
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competitor
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to scotiabank when it comes to the best
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place in canada to get a mortgage
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cheers
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