Mortgages from big banks consistently cost Canadians more, says rate comparison site says the big banks never offer the lowest mortgage rates on the market

Banks accounted for nearly 60 per cent of all current home mortgages, according to a report from Mortgage Professionals Canada last month. (CBC)

Mortgage rates from Canada’s big banks were consistently more expensive than those offered by smaller lenders last year, according to the latest findings from

The financial product comparison website said the lowest rates offered by the “Big Six” — Royal Bank of Canada, Toronto-Dominion Bank, Bank of Montreal, Scotiabank, Canadian Imperial Bank of Commerce, and National Bank of Canada — were always more expensive than the lowest rates from smaller lenders.

Justin Thouin, CEO of, said the big banks never offer the lowest posted rates on the market, and Canadians are not spending enough time researching rates before signing their mortgages, which could be costing them thousands a year.

“We compare prices when we do less costly things, like take a trip or buy a TV, but we don’t shop around for rates for homes — one of the most expensive purchases we’ll likely ever make — despite the fact that the money we can save on a vacation pales in comparison to what we can save on a mortgage,” Thouin said in a statement.

Using RBC’s announcement last month that it was decreasing its five-year fixed rate mortgage to 3.74 per cent as an example, the site said with the new bank rate, customers would pay $2,560 per month on a $500,000 mortgage, assuming that a down payment of at least 20 per cent was made to buy a home in order to avoid the CMHC insurance and a 25-year amortization period.

But, if customers in the same scenario got the best available five-year fixed rate mortgage from a smaller lender at 3.23 per cent, the monthly payment would be $2,426, according to That’s a difference of $134 a month, and would add up to $40,200 in savings over the course of a 25-year mortgage.

“Brokers and smaller lenders often drop their rates first to be more competitive, and banks are slower to implement changes, because they know they own the market,” Thouin said.

“This will only change when Canadians realize they’re being overcharged and begin to shift away from the banks, and that will only happen as we increase awareness about the alternative market.”

Banks account for nearly 60 per cent of all current home mortgages, according to a report from Mortgage Professionals Canada last month. Mortgage brokers took up almost 30 per cent of the market, while credit unions and others accounted for the rest.

CBC News contacted all of the big six banks for comment on’s findings.

A spokesperson for National Bank said that many factors are taken into account and assessed — including each client’s individual situation — before fixing a rate, and granting a loan.

TD said they offered “competitive rates,” and flexible mortgage options to meet their customers’ needs.