How to Find the Lowest Canadian Mortgage Rates Without Hurting Your Credit Score

The key to finding the lowest possible mortgage rates is to do a decent amount of research. However, if you go about this the wrong way, too much of your "research" might actually hurt your cause.

Approaching a local mortgage broker, or using a Canadian mortgage calculator are good way to do some research. On the other hand, going around to several financial institutions and getting "pre-approvals" from all of them is definitely not the right way to do this.

Whenever you apply for any type of credit your credit report gets updated to show that you applied. As a result, making too many credit applications per year could hurt your beacon credit score. It's highly recommend you make an absolute maximum of four applications per calendar year.

Your credit score is absolutely crucial to getting a low mortgage interest rate. The higher your score, the better your chances are on finding a low interest rate. In general the Canadians banks will require that your credit score is a minimum of 680 in order to even consider giving you a mortgage.

But not all hope is lost if your credit score currently lies below this magic number. There are a number of Credit Unions and Trust Companies who will offer people with credit scores between 620 and 680 the option to get a CMHC high ratio mortgage. The big downside is that these mortgages don't normally come with discounted interest rates.

Of course you don't have to go at all of this alone. If you prefer some professional help when shopping for a mortgage rate, it's highly recommended you consult with a mortgage broker in your area. These professionals can offer you the best advise on what the different banks are offering. Often, they are also capable of arranging discount rates at certain banks. A mortgage broker is also a great resource if your credit score is below 680, because they can often offer you some other solutions.

So, to sum all of this up. You want to avoid simply applying to mortgages at every bank you can find, just to see what kind of mortgage you can get, because it can seriously hurt your credit score and may even prevent you from getting any kind of mortgage in the end. However, you do want to get yourself a recent copy of your personal credit report (which includes your "FICO" score). This way you can see exactly what your current situation is. Next, it's a good idea to approach a mortgage broker in your area. And last, you may also want to follow the rate announcements the Bank of Canada makes from time to time as these rate changes will affect the mortgage rates you can get.