Offers & negotiating
Is this a good mortgage offer from my bank? (Canada)
Written by Stonefield Mortgage · Reviewed by David Steinfeld, principal broker · Stonefield Mortgage, FSRA mortgage brokerage licence #13722 · [review pending — before this page is indexed]
Published · Updated
In Canada, a mortgage offer is good when its full terms fit your plans and it holds up against another written offer for the same balance, term and amortization. The rate is one of about a dozen inputs, and it can only be judged against what other lenders would offer you on the same mortgage, subject to lender approval. The penalty method, prepayment privileges, portability, charge type, fees and dates can be worth more than a small rate difference.
What "good" depends on
Your term is the length of your contract. Your amortization is the total time to pay the loan off. Here is what an offer is made of, and what to ask about each part:
- Rate and type: note whether the rate is fixed or variable. Compare the rate with other written offers for your mortgage, not with an advertised number.
- Term: check whether the term ends around the time you expect to sell, move or refinance.
- Amortization: a longer amortization lowers the payment, and you pay interest for longer.
- Penalty method: on a fixed mortgage, breaking early usually costs the higher of three months' interest or the interest rate differential (IRD), and lenders may use posted rates to calculate it (source: Financial Consumer Agency of Canada, checked October 2026).
- Prepayment privileges: check how much you can add to your payments or pay as a lump sum each year without a charge. Paying more than the limit means a prepayment penalty (source: Financial Consumer Agency of Canada, checked October 2026).
- Portability: check whether you can move the mortgage to a new home, generally within the lender's time limits.
- Charge type: a standard charge generally secures only this mortgage; a collateral charge can make switching at renewal more involved.
- Fees: ask about lender, appraisal and legal costs, and who pays each one.
- Dates: check the closing or maturity date, and how long the rate is held. Rate holds are commonly 90 to 120 days.
- Down payment and insurance: if the mortgage carries default insurance, your loan-to-value (the loan as a share of the home's value) sets the premium. In Ontario, the provincial sales tax on the premium cannot be added to the loan (source: CMHC, checked October 2026).
How to judge the rate itself
There is no published "fair" rate for your mortgage. The Bank of Canada publishes the chartered banks' posted five-year mortgage rate every week (series V80691335; source: Bank of Canada, fetched October 2026). The posted series is a useful public reference, but it is a posted rate, not the rate many borrowers sign. Our posted vs discounted page explains the gap.
The only real benchmark for your rate is another written offer for the same balance, term and amortization. Comparing written offers needs someone who can ask lenders about your mortgage.
A worked example of a smaller rate with a fee
Illustrative, not a quote. Two offers on a $400,000 mortgage, each with a five-year term and a 25-year amortization. Offer A is 0.10 percentage points below Offer B but charges a $1,500 lender fee. Offer B has no fee.
| What you compare | Offer A: 0.10 points lower, $1,500 lender fee | Offer B: 0.10 points higher, no fee |
|---|---|---|
| Interest in year one | about $400 less (0.10 percentage points of $400,000) | about $400 more |
| Interest over five years | a little under $2,000 less (the balance falls, so not the full 5 × $400) | a little under $2,000 more |
| Lender fee | $1,500 | none |
| Net if you keep it all five years | a few hundred dollars ahead (a little under $2,000 − $1,500) | a few hundred dollars behind |
| Net if you sell or refinance within three years | behind: the fee outweighs about three years of the rate gap | ahead |
A difference in penalty method between the two offers could swing the result further than either of these numbers.
The full offer checklist and the offer check
Our is this a good mortgage offer page walks through each term with the questions to ask your lender. The offer check turns your offer into a scorecard on everything except the rate, which needs a lender comparison. Results are estimates only, not an offer or advice.
What to do next
Enter your offer in the offer check to see how its terms score. Or go to Can your bank do better?, and we will compare your offer with the lenders we work with. If your offer holds up, we will say so.
Common follow-up questions
Can a calculator or an AI assistant tell me if my rate is good?
Only partly. A calculator or an AI assistant can check the terms: the penalty method, the privileges, portability and how the term fits your plans. Neither can see the rates lenders would offer on your mortgage, because lenders generally don't publish those rates. A rate comparison takes someone with access to lenders, such as a licensed mortgage broker.
Is the offer with the smaller rate always the better one?
Not always. A smaller rate with a fee, a stricter penalty method or less prepayment room can cost more. Those terms matter most if you might sell, move or refinance before the term ends.
Can staying with my current lender be the right answer?
Yes. If your lender's offer holds up against a written competing offer and the terms fit, staying is a good result. Comparing is how you find out, and comparing does not commit you to moving.
General information for Ontario readers, not financial, legal or tax advice.