We spend more time planning our next vacation than we do researching our mortgage, according to a new survey released by LowestRates.ca.
The survey by the online search service for personal finance products found that Canadians spend an average of 7.75 hours researching for travel, while mortgage shopping takes us only 5.75 hours. That may be because Canadians have a blind loyalty to big banks and they’re not shopping around before signing a mortgage that’s potentially costing them more than $30,000 over the lifetime of the contract.
Other key findings from the LowestRates.ca survey are:
1. Two in five respondents said they did not consult with any other service than the one that sold them their mortgage.
2. Sixty-seven per cent end up sourcing their mortgage through a bank, 22 per cent used a mortgage broker and 13 per cent said they went to a credit union.
3. Only 8 per cent said they used a rate comparison site to source their most recent mortgage, even though 60 per cent said they will likely use one in the future.
By not exploring your mortgage options, you’re leaving money on the table – and that could prove to be problematic in the long run. There comes a point when we all consider retiring and at that point, you need your financial capital to take over from where human capital – the ability to go out and earn an income – left off.
Even Bank of Canada Governor Stephen Poloz cautioned earlier this week that, in this era of low interest rates, Canadians should consider saving more for their retirement, working longer and explore changing up the asset mix of our portfolio. Weak economic growth coupled with lower rates for a longer period of time and our longer life expectancies can challenge even those who have tucked a little away for their golden years.
It just makes sense to look for every opportunity to save, and the obvious place to start is with the mortgage costs needed to finance one of the largest assets that most people own.
Yet saving money it isn't always as obvious as shopping for the best rates. I appreciate it can be tough when you are younger to comprehend there may come a time when you might regret some of your financial decisions that were made earlier in life.
Take a recent housing survey from TD Bank highlighting that millennials are set on finding their perfect "YOLOcation" (Using the "you only live once" mentality and applying it to home buying). Nearly half of those who commute say they are likely to spend more money on a home in order to live closer to work, compared to only 34 per cent of Canadians as a whole. Living closer to work has its benefits, but purchasing a home in an expensive urban city comes with a high price tag. A 45-minute commute could translate into a stronger financial future.
Creating wealth is never about doing just one thing right. It is about doing a whole host of little things right. Shopping for a mortgage, setting goals around home ownership, looking for cost savings, moving beyond living only in the moment and allowing yourself the time to build a solid financial foundation are just a few of the ways you can combat turbulent times.
You can't control the economic environment but you can control how you respond to it.
As the Chief Financial Commentator for CTV News, Pattie Lovett-Reid gives viewers an informed opinion of the Canadian financial climate. Follow her on Twitter @PattieCTV