Read Time: 3 Minutes

If your goal with your mortgage is to keep as much of your hard earned money in your pocket as possible, you’re not alone.

At some point in getting a mortgage, every borrower struggles to commit to an option.

They fear making the wrong choice.

The fact is that choosing the right option is hard.

Rates are moving a lot, and the future is very uncertain.

Rate protection is one of the key strategies I use to make the process easier.

I use it after we’ve optimised all other parts of your strategy and locked in with a lender and a rate.

In December 2023, I used this exact strategy to save a client $17,021. 

The best part, you can use it in every mortgage situation.

You can use it when buying a property, renewing a mortgage, or refinancing a mortgage.

And, I’m going to explain exactly how it works.

Now, let’s dive in.

For most, the rate conversation ends when they apply for a mortgage and sign the lender’s offer.

This can happen as much as 4 months before the mortgage actually closes.

When using my rate protection strategy, this is where the opportunity begins.

The rate protection strategy is about continuing to track interest rates, the economy, and lenders’ offers.

You do this from the time you commit to a mortgage until your final closing. 

The benefit is that you’ll be able to request a lower rate, if the chance arises.

If it does, it will cut your interest expense by hundreds or thousands of dollars.

The hard part: your lender isn’t going to notify you of the opportunity.

So, you’ll need to watch the market yourself or work with an independent broker to do this for you.

This strategy takes advantage of the market’s ups and downs.

It turns what often causes anxiety into a chance to save money.

This is especially important today, when rates are up and down week to week, but generally moving down.

The week that you decide on your mortgage, might not be the best timing for rates. 

But, if the time until your final closing is long enough, there is a greater chance for rates to move in your favour.

The strategy also plays off the lender’s fear of losing the mortgage if rates have changed in your favour.

But be careful, you don’t want to push them too far.

Ready to use the rate protection strategy on your next mortgage?

Again, you can use it in every situation.

So whether you are buying a property, renewing an existing mortgage, or refinancing a mortgage, this can work for you.

Here’s a simple guide, to help you put the strategy in action:

1. Understand when your mortgage is closing
2. Know the lender’s policy for allowing rate changes (number of requests, and cut off)
3. Be prepared to switch lenders, if timing and circumstances allow
4. Track the data: Mortgage Rates and Bond Yields
5. When the opportunity arises, act fast to make the request
6. If the lender’s policy allows, rinse and repeat until closing

In December 2023, I used this strategy to cut a client’s rate by 0.60%.

And I did it 5 business days before their final mortgage closing.

3 months after approval.

No changing lenders.

No changing terms.

Some updated paperwork to sign, and away we go.

As a result, we were able to reduce the interest they’ll pay for the 3 year term by $17,021!

There are many things to track to make this work.

And it’s easy to accept your current offer, but the extra work can save you thousands.

I hope that you can use this strategy to keep more money in your pocket, and away from the banks.

I use this strategy among others to ensure the protection of my clients.

With the goal of saving them as much money as possible over the life of their mortgage.