As expected, following last week’s Bank of Canada rate cut, the number one question we’re hearing is:
“How much did mortgage rates go down?”
Fair question.
But here’s something I’ve learned in my career:
The lowest rate isn’t always the best deal.
A real example
I worked with an investor who bought an investment property and locked in the “cheapest” mortgage rate they could find.
At the time, it looked like a win. Lowest payment. Maximum savings.
But within two years, life shifted. They wanted to upgrade their family’s home and needed the equity from that rental property to help finance it.
The lender they were with would not allow them to refinance to extract the sufficient equity needed.
So their only option was to sell.
When they went to sell, the penalty on that mortgage was tens of thousands of dollars.
That “cheap” mortgage turned out to be very expensive.
Why it’s not one-size-fits-all
The right mortgage depends on your situation:
- Primary residence vs. investment property
With investments, flexibility and tax treatment often matter more than shaving off a few basis points. - Salaried employee vs. business-for-self
Business owners usually need structures and payment options that account for uneven income. - Residential vs. commercial mortgage
Commercial loans come with covenants and risks that don’t exist in a simple home loan.
There’s no such thing as “one best mortgage.”
My own choice
I’ll be honest: on my own residential mortgage, I didn’t take the lowest rate I could find.
Why? Because for strategic reasons, flexibility and structure were more important than saving an extra 0.10%.
That choice has already saved me headaches — and potentially a lot of money — even if it meant paying a touch more in interest.
If you’d like to hear my full reasoning, I’d be happy to share it with you over a cup of coffee.
The bigger message
This ties into the bigger theme I’ve been writing about:
- The “old rules” (cash is king, debt is bad, lowest rate is best) don’t hold up anymore.
- Real safety comes from strategy: assets that produce income, debt structured to work for you, and flexibility when life changes.
- Mortgages are one of the biggest financial decisions most Canadians ever make. Reducing that decision to “what’s the lowest rate?” is short-sighted — and often costly.
My advice right now
- Don’t assume the lowest rate is the best deal.
- Think about penalties, terms, portability, and flexibility.
- Match your mortgage to your life, your goals, and your risk tolerance.
If you’ve got a renewal coming up, or you’re weighing options after the Bank of Canada cut, let’s review your situation together.
→ Just reply to this email and we’ll set up a time to chat.
Talk soon,
— Vince.
