There are several sorts of mortgage lenders, including big banks, mortgage lenders, mortgage brokers, and credit unions, each with its own set of benefits and drawbacks for borrowers. Big banks are multibillion-dollar financial institutions that provide a variety of financial services, including deposit accounts, credit cards, and mortgages.
Competitive loan terms, significant discounts, and customized mortgage Bank of Nova Scotia programs are all benefits of choosing a large bank for your mortgage.
Big 5 Banks in Canada: Which One Should You Choose?
The bank that you choose from the big five Canadian banks should depend on the type of mortgage you are looking for.
The Big Five Banks refers to the five major banks in Canada: Royal Bank (RBC), Bank of Montreal (BMO), Canadian Imperial Bank of Commerce (CIBC), Bank of Nova Scotia (Scotiabank), and Toronto-Dominion Bank (TD).
Royal Bank of Canada: Fixed-Rate mortgage
The Royal Bank of Canada is a worldwide financial services corporation headquartered in Canada. It is the country’s largest bank by market capitalization. The bank employs over 86,000 people worldwide and services over 16 million customers.
RBC has favourable fixed rates. Choosing a fixed rate mortgage means you won’t have to worry about future interest rate swings during your mortgage term, whether you’re purchasing your first home, moving to a new house, or renewing an existing mortgage.
A fixed-rate mortgage has an interest rate that is fixed or “locked-in” for the duration of the loan. As a result, you’ll know exactly what to expect when it comes to your mortgage’s:
- Interest rate
- Monthly payments
Your fixed interest rate can be guaranteed up to 120 days before your home’s closing date if you’re getting a new mortgage. Even if interest rates rise during that time, you’ll still get the lower rate.
RBC will also guarantee your mortgage interest rate for 30 days ahead to your renewal date when it comes time to renew.
Toronto-Dominion Bank: Collateral Mortgages
The Toronto-Dominion Bank, Canada’s second-largest bank, has the most assets, valued at C$1.7 trillion as of January 2021. This bank has over 9.6 million customers, 25,000 staff, and over 1,100 branches around the world.
TD Mortgages provide you with the freedom to decide how frequently and for how long you want to make payments. TD Mortgages offers collateral mortgages.
A collateral mortgage is a sort of re-advanceable mortgage, which means you can borrow additional money when your mortgage is paid off or as the value of your home increases. To achieve this, TD Mortgage will use the equity in your property as a collateral asset against your line of credit, if you qualify.
Bank of Nova Scotia: Equity Takeouts
The Bank of Nova Scotia, or Scotiabank, is Canada’s second-largest bank, with assets of C$1.1 trillion, revenue of C$31 billion, and capitalization of C$67 billion by the end of 2020.
The bank has over 11 million Canadian customers, 10 million international customers, 92,000 full-time workers, and over 900 branches around the country. This institution allows customers to trade on the New York and Toronto Stock Exchanges.
The Scotia Total Equity Plan (STEP) is a flexible borrowing option backed by your home’s equity.
STEP allows you to choose from a variety of Scotiabank credit products (mortgages, lines of credit, credit cards, and more) based on your specific needs, all through a single application. With STEP you can have an equity takeout of your choice while being completely in control.
Bank of Montreal: Variable-Rate Mortgage
The Bank of Montreal is Canada’s fourth-largest bank, with assets of C$949 billion and revenue of C$25 billion at the end of 2020. The bank has almost 900 branches and over 8 million customers in Canada.
The variable-rate mortgages offered by the Bank of Montreal, or BMO, are well-known. Variable-rate mortgages from BMO have set payments. That implies you’ll pay less principal and more interest if the prime rate rises, and vice versa. The payment is always the same (until interest rates climb to the point that you can’t meet the interest due).
If you are looking for a variable-rate mortgage BMO is the best bank to go to.
Canadian Imperial Bank of Commerce: Refinance
The Canadian Imperial Bank of Commerce has C$770 billion in assets, C$18.7 billion in revenue for 2020, and C$44 billion in capitalization. The bank has more than 11 million customers globally, 1,100 branches in Canada, and more than 44,000 full-time staff.
When you refinance your mortgage, you swap out your current loan for a new one with better conditions. To determine whether you qualify, your lender divides the sum owed on your mortgage and any other loans secured by your property by the current value of your property.
You can refinance if your loan-to-value ratio is less than 80%. If a loan refinance appears to be a possible option for gaining financial control, contact CIBC to get the best refinance mortgage for your needs.