Have you ever wondered why your neighbor brags about paying less for their mortgage, even though you bought around the same time, in the same neighborhood, and maybe even borrowed the same amount? The truth is, mortgage costs aren’t just about luck. It often comes down to how you negotiate, who you work with, and the strategy you employ.
At Cannect, we see this every day: some homeowners are unknowingly paying thousands more in interest than they should, while others unlock rates and terms that keep more money in their pockets. Let’s break down why this happens and how you can make sure you’re on the winning side.
Big Banks Don’t Always Offer the Best Rate
Most homeowners go straight to their bank for a mortgage, thinking loyalty will pay off. But here’s the catch:
- Banks have posted rates that are often higher than what’s available in the market.
- Bank staff work on sales targets, not on getting you the best deal.
- The “discount” they give you may still be far from the lowest rate you can qualify for.
Your neighbor might have worked with a mortgage broker instead, someone with access to multiple lenders, private options, and alternative solutions. That difference alone could save tens of thousands of dollars over the life of a mortgage.
Variable vs. Fixed: Timing Is Everything
If your neighbor is paying less, chances are they chose a mortgage strategy that matches the current interest rate environment.
- In times when rates are high but expected to drop (like we’ve seen recently in Canada), variable-rate mortgages can save borrowers money.
- Fixed-rate mortgages provide stability, but often come with higher costs, especially if you need to break your term early.
Cannect often recommends exploring variable-rate mortgages because they can give you flexibility and long-term savings, especially in a shifting market.
Mortgage Term and Amortization Tricks
Not all mortgages are created equal. Even with the same rate, your monthly payment can look very different depending on:
- Amortization period (25 vs. 30 years).
- Payment frequency (monthly, bi-weekly, accelerated).
- Prepayment privileges (how much extra you can put toward the principal).
Your neighbor might have extended their amortization to lower monthly payments or chosen an accelerated bi-weekly plan to pay down their mortgage faster. Small tweaks can make a huge difference.
Home Equity Can Work in Your Favor
Another reason your neighbor might be ahead: they tapped into their home equity smartly.
Instead of juggling high-interest credit cards or personal loans, they may have consolidated debt with a home equity loan, lowering their overall interest costs. By using their home equity strategically, they’re keeping more of their income free for savings or investments.
Access to Alternative Lending Options
Not every homeowner fits neatly into a bank’s criteria. If you’re self-employed, a small business owner, or have non-traditional income, banks might reject you or stick you with higher rates.
Your neighbor might have worked with an alternative lender or invested through a Mortgage Investment Corporation (MIC), options that Cannect specializes in. These lenders often provide competitive rates and more flexibility, without the red tape.
Negotiation and Guidance Matter
The biggest difference-maker? Unbiased advice.
If you’re working directly with a bank, you’re negotiating alone against a massive institution. But with Cannect, you get:
- Unbiased guidance (we don’t work on commission).
- Access to the lowest loan-to-value mortgages in the industry.
- Options beyond the banks — including private mortgages and MIC investing.
That’s why your neighbor might be paying less — they had someone in their corner.
How You Can Pay Less for Your Mortgage Too
The good news? It’s not too late to lower your mortgage costs. Here’s what you can do right now:
- Review your current mortgage with Cannect to see if you’re overpaying.
- Explore variable vs. fixed options for your unique situation.
- Tap into your home equity if you’re managing high-interest debt.
- Work with unbiased experts who put your financial goals first.
Your neighbor’s lower mortgage payment isn’t a mystery; it’s a strategy. By working with the right professionals, choosing the right mortgage product, and leveraging your home equity, you can achieve the same (or even better) results.
At Cannect, we’re here to make sure you stop overpaying and start saving.
Talk to a mortgage specialist today at 416.766.9000 or visit Cannect.ca — and find out how much you could save on your mortgage.