Why the Lowest Mortgage Rate Could Cost You More in the Long Run
- tonia503
- Jun 23
- 3 min read
It’s one of the first questions I get asked:“What’s your best rate?”
I get it — with rates plastered all over bank ads and online calculators, it’s natural to assume that the lowest rate equals the best deal.
But here’s the truth most Canadians don’t hear:The lowest rate doesn’t always mean the lowest total cost. In fact, it could end up being the most expensive choice you make in your homeownership journey.
Let me explain.
💡 Rate Is Just One Piece of the Puzzle
When it comes to mortgages, there are multiple factors that affect your long-term costs, flexibility, and financial peace of mind.
Here are the most important ones to understand:
1. 🔒 Prepayment Penalties
If you need to break your mortgage early — due to a move, separation, refinance, or life event — you’ll likely pay a penalty.What most people don’t realize is that some lenders calculate penalties very differently.
Monoline lenders (like First National, MCAP, or RFA) often use fairer formulas.
Big banks often use inflated posted rates to calculate your penalty — which can cost you thousands more.
So that “rock-bottom rate” could come with a $10,000+ penalty later.
2. 🛠️ Mortgage Flexibility
Some low-rate mortgages are “no-frills” — meaning:
You can’t increase your payments
You can’t make lump-sum payments
You can’t refinance
You can't break your term unless you are selling
That lack of flexibility can hold you back from becoming mortgage-free faster or using your equity when you need it.
3. 🔁 Portability & Blend Options
Planning to move before your term ends? Some lenders let you “port” or “blend and extend” your mortgage, keeping your rate and avoiding penalties.
Others don’t — meaning you could face a big penalty, even if you're staying in the same homeownership journey.
4. 🤝 Service & Advice
Online rate-only lenders often offer... well, just that — a rate.What you’re missing is:
Personalized guidance
Strategy tailored to your goals
A real person who understands your situation and advocates for your best interest
Sometimes, that’s worth a slightly higher rate to protect your bigger picture.
✅ The Mortgage Missus Approach
My role is to help you find the most suitable mortgage, not just the cheapest one.That means I look at:
Your short- and long-term goals
Your income and lifestyle
Your tolerance for risk and change
And yes — the rate that fits within the full picture
🏁 Bottom Line:
Rate matters — but so do penalties, flexibility, and support.Sometimes, the “best rate” costs more than you bargained for.
If you're not just looking for a mortgage, but a mortgage strategy, I’m here to help.
🙋♀️ Need help making sense of it all?
Book a Discovery Call with The Mortgage Missus — let’s talk through your options before you commit to a number that might not tell the whole story.
-Tonia, The Mortgage Missus
Contact The Mortgage Missus Inc. today to learn more!
About the author,
Tonia Mercer is an independent mortgage broker. She has been in the industry for 17 years, in 2021 she launched her own brokerage The Mortgage Missus Inc.
Tonia is passionate about financial education and believes that working with independent experts is the best way to get unbiased, professional advice. She has joined forces with local independent home and auto, financial advisor, legal, appraiser and real estate service providers. Effectively creating a concierge service for all things financial and real estate.
Tonia donates a portion of all mortgage revenue to Mercer's Mission, a street dog and cat feeding mission in the Dominican Republic. https://www.facebook.com/mercersmission
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