"What's your best mortgage rate?" I hear that all the time from inquiring clients. Mortgages are like investments (mutual funds): depending on the client's tolerance for risk and 3-5 year financial and family plan, each mortgage product has its pros and cons. Today's homeowners typically ask for 5 year "best mortgage rate", however very few question why 5 year is the only term they ask for. This is an actual story that happened 2 weeks ago: a client's mortgage renewal came up and after meeting with them to understand their financial situation and their wishes to pay off the mortgage in 6 years, I recommended a short term (2.5 year) variable product. They mentioned they wanted to shop around for "best mortgage rate". They were provided with a mortgage that was 0.1% less than the one I offered. After deciding to move forward with the lower cost mortgage, they discovered the product's minimum amortization is 16 years and has a very restricted increased payment privileges (no pre-payment allowed). Realizing there is more to mortgages than rates, they came back and moved forward with my recommendations which achieved their desired goal of being mortgage free in 6 years.

It is important when getting a mortgage to consider the following factors over 3 to 5 year span:

What will your cash flow situation be?
Do you plan to buy a rental property or a cottage?
Do you plan to be self employed?
When do you want to be mortgage free (specific date)?
Any plans to renovate the home?
Will you need to access your home equity?
Do you have children who will be attending post-secondary schools?
Do you plan to invest into RRSPs & other retirement vehicles?

The next time you give me a call to ask: "What's your best rate" and I answer with "I would love to help you, but let me ask a few questions" I hope you understand.