The Core Four Ways to Lower your Rates: What The Bank Will Never Tell You
The Core Four Ways to Lower your Rates: What The Bank Will Never Tell You
When it comes to securing the best mortgage rate, timing and strategy are everything. At Level Up Mortgages, we’ve developed a unique approach called the Core Four Rate Negotiation Strategy that helps homebuyers lock in the most competitive rates throughout the buying process. From pre-approval to closing, each stage presents an opportunity to reduce your mortgage rate and save money in the long run.
The Canadian mortgage landscape can be complex, but with the right guidance, you can take advantage of fluctuations in rates and lender policies to maximize affordability. Below, we’ll walk you through each level of the Core Four strategy, so you can see how we work to ensure our clients benefit from the best possible rates.
Level 1: The Pre-Approval Rate
When you first apply for a mortgage, most buyers will receive a pre-approval rate. This rate is typically around 0.20% higher than what would be offered to someone with a live offer on the table. Why is this? Lenders tend to reserve their best rates for buyers who are further along in the process, typically those with binding offers. At this stage, lenders don’t see you as a confirmed borrower, so they’re not as willing to offer their most competitive rates.
However, the pre-approval rate serves as a useful starting point. It protects you from potential rate increases, giving you peace of mind while you continue shopping for your dream home. As we progress to the next stage, we work to get that rate down.
Level 2: The Live Offer Rate
Once you’ve placed an offer on a property and it’s accepted, you’ve entered what we call the Live Offer Rate stage. This is where things start to get more competitive. At this point, lenders know you’re serious, so they offer their best publicly available rate for your specific borrower profile and market timing. Typically, this is around 0.20% lower than the pre-approval rate.
This stage already represents significant savings compared to your initial pre-approval. But the journey to lower rates doesn’t stop here. Now, we use our expertise and network to push things even further.
Level 3: The Special Exception Rate
At Level Up Mortgages, we’ve built strong relationships with lenders, which allows us to negotiate special exception rates for our clients. A Special Exception Rate can lower your mortgage by another 0.05% to 0.20% based on a variety of factors, such as competing offers, current market conditions, or lender promotions. Our reputation as top brokers gives us the pricing power to advocate on your behalf.
In addition, your borrower profile plays a key role here. If you have a strong financial standing or belong to certain professional groups, lenders may be more willing to offer better rates. We work closely with you to present your profile in the best possible light to lenders.
Level 4: The Float Down Rate
The final stage of the Core Four strategy is the Float Down Rate. This occurs when market conditions, particularly bond yields, cause lenders to adjust their fixed-rate offers. If bond yields decrease during the time between your accepted offer and your closing date, it creates an opportunity to lower your rate even further. This drop could range from 0.05% to 0.15%, and it’s something we monitor closely on your behalf.
The key here is timing. Most lenders won’t proactively lower their rates unless you request it. At Level Up Mortgages, we track bond market trends and nudge lenders at the right moment to ensure our clients receive the best possible rate. Without this active monitoring, many buyers miss out on savings opportunities that arise late in the process.
How Much Can You Save?
By using the Core Four Rate Negotiation Strategy, you can see significant savings from your initial pre-approval rate to the final closing rate. On average, the difference can be as much as 0.50%, depending on market conditions and timing. That might not sound like much, but over the life of a 25- or 30-year mortgage, it can add up to tens of thousands of dollars in interest savings.
However, it’s important to note that not every borrower will move through all four levels. Over half of our clients lock in their final rates at the Live Offer Rate stage, but for those who trust the process and allow us to work through each stage, the potential for savings is substantial.
Why Trust Level Up Mortgages?
At Level Up Mortgages, we believe in full transparency and communication. Our clients consistently rank us as top brokers, and with nearly 100 glowing Google reviews, we’ve earned a reputation for delivering results. Our Core Four Framework is designed to ensure that you not only get the best possible rate but also have the peace of mind that comes with knowing we’re advocating for you every step of the way.
BOTTOM LINE
By equipping yourself with the Core Four Rate Negotiation Strategy and leveraging the expertise of Level Up Mortgages, you can confidently navigate the mortgage approval process. Whether you're a first-time homebuyer or a seasoned investor, understanding how to optimize your mortgage rate through each stage will set you up for success in Canada’s competitive real estate market. Trust us to help you secure the best rate and save money on your dream property.
Level Up Mortgages is a mortgage broker team focused on helping the self employed, new immigrants, non-residents, and investors, access best rate and alternative lending in Canada. We have been nominated for best up and coming broker in Canada in 2021 and have been on CTV News and various publications because of our education-first approach to helping you always stay a step ahead of the process. Reach out to us for access to our first-time buyer course or a mortgage strategy session.
See What You Qualify For Or Contact Paul To Get Your Pre-Approval.
Paul Davidescu (www.levelupmortgages.com)
Level Up Mortgages
604-809-3188
paul(at)levelupmortgages.com
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