It’s About the Features, Remember?

Here we go. It’s starting.

Amid cold-blooded rate competition, the banks are turning on the “feature charm” and touting their mortgage perks. The goal: to shift your attention from their higher rates.

And why shouldn’t you? Features, advice and mortgage flexibility really do matter, as mortgage penalty victims routinely find out.

But there’s more to it than that. The banks’ discretionary 5-year fixed rates are at least 0.10 to 0.30 percentage points above the competition. Other things equal, every 0.10 of rate difference will cost you roughly $470 more over five years, for every $100,000 of mortgage.


Banks don’t want you to hone in on that, which is why you won’t see rates advertised in RBC’s reprised employee mortgage pricing promotion. (That campaign, which started today and ends July 3, is designed to trigger a “call to action,” says RBC—i.e., get people to contact a bank representative for rate details.)

“The whole…industry seems to focus on one thing and one thing only, which is the rate,” RBC SVP Sean Amato-Gauci told The Globe and Mail.

Well, we could focus on other things, like RBC’s once-a-year lump-sum prepayment limitation or often harsh interest rate differential (IRD) penalty. (Nothing against RBC, a respected institution. It just doesn’t have the best mortgage features-wise.)

So yes, spend time weighing other aspects of the mortgage and don’t let a one-basis-point (0.01%) rate difference be your deciding factor. Then again, don’t pay one basis point more than you have to either.

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