Why you should care about the banks’ posted rates on mortgages

There are not too many Canadians who get tricked into accepting the posted rate on a mortgage anymore but that doesn’t mean no one should care when the banks drop their published rates.

What’s key about the posted rate is that it is used by the Bank of Canada to create what is called the qualifying rate. The prime rate is 2.85% today, and you borrow at even less, but if your mortgage is for a term under five years, you qualify based on the posted rate — meaning you must borrow based on a higher monthly payment which ultimately means you can take on less debt.

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