The last time you were at a major retailer or supermarket, the check-out clerk probably asked for your points card. If you didn’t have one, he offered to sign you up. Repeat customers are rewarded, you were told.
This is often true, but not with mortgages, the Toronto Star reports. Drawing on a Bank of Canada working paper, the report explains that “existing customers assume they will automatically get a better deal because they’re loyal, but don’t….[P]eople who switch banks get a better deal…because new customers offer the banks an opportunity to sell more products.”
The report also notes that mortgage brokers dig up the best rates, thanks to intense competition. “[O]n average, borrowers that use a broker pay less on their mortgage than borrowers who do not,” the working paper says.
Read more here.
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