How does a mortgage from Houski compare with a mortgage from a bank?
In this article we'll examine what the difference is between getting a mortgage from a bank, a mortgage broker, and Houski.
The easiest way to understand is to first compare the mortgage offerings between mortgage brokers and banks.
The difference between a mortgage from a broker vs a bank
The most significant differences between mortgage offerings between mortgage brokers and banks break down into two categories:
You can imagine any "mortgage product" (which is what we often call them in mortgage industry jargon) is just like a car. When you're buying a car, you have your choice of features.
Here are some examples of common mortgage product features:
To continue with our car analogy, the addition or removal of specific features raises and lowers the purchase price of the car. Mortgage products are very similar in that regard, except for a mortgage product, the "price" is raised and lowered by adjusting its interest rate. The higher the interest rate, the more you're "paying" the lender, and vice versa.
One difference that mortgage products have that cars do not is "penalties". Not only do you lose features with lower rate mortgage products, you often gain harsher penalties. Penalties are incurred if you ever need to "break" your mortgage commitment. For Canadians, this happens on average every 3.5 years - so statistically if you take a low rate product with a bad penalty, you're very likely to lose money in the long run. Life happens, you get a promotion and you need to move, you have a baby and need a bigger place, etc. Think about it this way - lenders would not offer these extremely low rate products unless they were making money on them. No free lunch.
Can Houski get you the lowest available rate? Generally, yes. Would it be ethical for us to get you the lowest rate product without advising you of it's specific features (or lack of)? Absolutely not.
So those are some general rules about the main differences between all mortgage products. Now we can drill down into the details of what the differences tend to be between bank and broker mortgages products.
Bank mortgage products
Broker mortgage products
So from that comparison, you're probably thinking "it seems obvious that getting a mortgage from a broker is the better deal", and you would be correct. The final nail in the coffin for choosing a broker over a bank is simply because brokers have access to bank mortgage products, and can often get you a lower rate than you would get by going directly to the bank anyway. Why? Because brokers have a lot more negotiating leverage than a person walking into a bank. We can send the deal somewhere else if they don't match our other lenders.
So that's a quick summary of the differences between a bank and a broker. So now let's compare the difference between the typical broker, and Houski.
The first thing to note is that Houski is a mortgage broker, but it does not operate like a typical mortgage brokerage. Houski uses technology to create the best mortgage application experience available in Canada. We do things you won't find anywhere else, like collect the documents that are required to get your mortgage for you, all online. We then send your deal to a trusted broker partner, who will assist you in completing your deal and getting your new house! We also donate part of the proceeds to animal charities, so when you get a new home, an abandoned or abused animal gets a new home too.
There are many reasons we do this, most of them increase the quality of service offered to yourself, the customer.