How to Negotiate a Mortgage to Get the Best Product

As experienced mortgage brokers in Quebec, we know that negotiating a mortgage goes far beyond securing the lowest interest rate. It’s about understanding the full scope of the loan conditions, repayment options, penalties, and long-term implications. Here’s what you need to know before signing with a financial institution.

Key Points to Know:

• Mortgage brokers work with multiple lenders, including banks, credit unions, and alternative lenders.
• Their high transaction volume allows them to secure competitive rates and conditions tailored to each client’s needs.
• Mortgage broker services are free for borrowers. Lenders pay the broker’s commission.
• Loan conditions often matter more than the interest rate itself.
• A broker can explain the differences in prepayment penalties between lenders offering the same rate. These penalties can vary significantly.
• Rates and conditions change frequently. What your brother-in-law got a few months ago may no longer apply.
• A valid license from the AMF (Autorité des marchés financiers) is mandatory. Make sure your broker holds an active certificate.

Essential Questions to Ask Before Signing:

1 – Can I increase my payments?
Most mortgage contracts allow for increased payments, but limits vary. Some lenders allow a 10% increase, others up to 25%, and a few even permit doubling your payment.

2 – Can I make a lump-sum payment?
Most mortgages allow annual lump-sum payments ranging from 10% to 25% of the original loan amount. Some lenders restrict this to a specific date, while others are more flexible.

3 – What will the collateral amount be?
More lenders are using collateral (umbrella) mortgages that can go up to 125% of the property’s value. This makes it easier to access credit later without returning to the notary, but it can limit your options if your credit profile deteriorates.

4 – How are penalties calculated?
If you break your mortgage early due to a sale, separation, or move, you may face penalties of several thousand dollars. Always ask for a concrete example. Some loans offer no exit before the term ends.

5 – Can I transfer my mortgage to a new property?
Mortgage portability depends on the lender. Some allow you to transfer the loan to a new property without penalty, while others require refinancing. In all cases, the new loan amount is limited to 80% of the property’s value, which may restrict your options if equity is low.

When Should You Start Negotiating?

We recommend starting the process at least six months before your term ends. This gives you time to compare offers, lock in a competitive rate, and prepare your file.

Have questions or want to discuss your mortgage situation? Contact us today. We’re here to guide you, advise you, and help you secure the best possible conditions for your loan.