Level Up Mortgages

Blog Posts

 

Beyond the Rate: What Most Borrowers Overlook When Choosing a Mortgage

Most borrowers walk into a mortgage conversation focused on one thing: getting the lowest interest rate. But smart financing isn’t just about rate—it’s about how the mortgage aligns with your life goals, financial plans, and future flexibility. Recently, a borrower learned just how much more there is to consider when he sat down for a deep dive with a strategic mortgage advisor. What he thought would be a quick rate comparison turned into a full financial awakening.

Why Rate Isn’t the Full Story
Many borrowers start with a simple goal—lower their monthly payment. But after working through the numbers and mortgage features, this borrower realized that key elements like the following can significantly impact the real cost of borrowing:

  • Breakage penalties if rates drop again and they want to refinance early

  • Portability limits, such as needing to buy and sell within 90 days versus 120

  • Prepayment privileges and how much flexibility they offer

  • HELOC access and structure for renovations, education, or investing

Each of these components can either limit or expand your options as life evolves.

An Overlooked Wealth-Building Strategy
One eye-opening concept introduced during the conversation was the Smith Maneuver—a strategy that converts mortgage interest into a tax-deductible expense by reborrowing home equity to invest. This only works with certain mortgage products that offer a revolving line of credit, something many borrowers—and even some lenders—don’t fully understand.

When structured properly, this approach can accelerate wealth-building significantly, while potentially reducing the effective cost of borrowing.

The Power of Cash-Back vs. a Lower Rate
Another key insight came from comparing a lower-rate mortgage to one with a slightly higher rate but a significant upfront cashback offer. The math revealed that the difference in rate—around 0.11%—worked out to only about $69/month.

Over five years, a cashback of $4,179 could more than make up for that gap—and if invested, could compound to much more. The takeaway? Sometimes cash in hand beats small rate discounts, especially when used strategically.

Working With the Right Advisor Matters
What truly stood out in this case was how the borrower’s perspective shifted. Rather than choosing a lender based solely on price, he began to see the value of partnering with a mortgage strategist—someone who could:

  • Flag hidden costs and product limitations

  • Provide a longer-term financial roadmap

  • Stay engaged beyond the initial transaction to help pivot when the market shifts

Banks often operate as order-takers. A proactive advisor acts as a financial partner—someone invested in your success, not just your signature.

Final Thoughts:
If you’re shopping for a mortgage, don’t stop at the rate. Ask the deeper questions:

  • How flexible is this product?

  • What will it cost me if life changes?

  • Could I be building wealth more effectively with a different structure?

By looking at your mortgage as a financial strategy—not just a loan—you’ll make decisions that serve you now and for years to come.

BOTTOM LINE

The best mortgage isn’t just the one with the lowest rate—it’s the one that supports your long-term goals, offers flexibility for life changes, and opens up opportunities to build wealth. A strategic advisor can help you uncover those hidden advantages—and avoid costly mistakes.

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

See Our Google Reviews in BC & Ontario: bit.ly/GoogleReviewLUM ⭐️⭐️⭐️⭐️⭐️

Paul Davidescu