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Banks want to pay you to borrow money.
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We’re talking thousands of dollars in many cases, via cash rebates on new mortgages.
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Why? Because they’ve done the math and expect to earn it back.
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All of the Big Six banks are doing this to lure in your business.
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Here’s what’s currently on the table for someone taking out a $500,000 mortgage, subject to each offer’s conditions:
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- BMO: $2,100
- CIBC: $2,000
- National Bank: $1,500
- Scotiabank: Up to $1,000
- TD Bank: $1,500
- RBC: $1,500
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These numbers are current as of Oct. 23, but offers can change, so confirm the amount and eligibility requirements with the bank.
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What to remember
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If you’re getting a mortgage through a mortgage broker, they often have access to the same deals, but not always.
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And if you’re going with a non-bank lender (e.g., a credit union), they frequently have cash-back sweeteners of their own, and sometimes patronage dividends (“member profit sharing”), too.
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Then come the extras — for example:
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- National Bank tosses in an extra $1,000 on a $500,000 loan if the mortgage is for a first-time buyer making a default insured purchase with 30-year amortization.
- RBC tacks on an extra $500 for first-time buyers.
- RBC and Scotiabank offer Avion and Scene+ points as bonuses.
- Scotiabank pays up to $1,500 in eligible switch costs (most banks pay for switch costs, but most do not pay your existing lender’s discharge/assignment fee).
- RBC and TD Bank add $1,100 for folks who switch to them.
- TD offers another $500 if you add a home equity line of credit (HELOC). Banks always appreciate a relationship with more room for borrowing.
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Of course, banks don’t hand out money without strings attached, and some of these strings could moor a cruise ship:
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- Virtually all lenders make you pay the mortgage from one of their bank accounts. That’s how they rope you in to sell you other products and generate account fees.
- Some make you open other accounts as well — a low-interest savings account, for example, in the hopes you’ll be dumb enough to park money there and earn below-market interest.
- Often the mortgage term must be three years or more.
- Some lenders, like BMO, require borrowers to stay with them for five years, even if their term is shorter — or else pay back a pro-rated portion of the cash received.
- Some lenders reserve their best offers for those who add a home equity line of credit (HELOC). They appreciate a relationship with room for more borrowing.
- If you break the mortgage early, you have to pay back some or all of the cash (usually a pro-rata amount).
- Some banks require direct deposits (e.g., from your employer, pension provider or the government) into the new account, as this encourages more banking activity and gives you more to untangle if you try to leave.
- Some offers apply only to new customers of the lender.
- Borrowers with existing accounts may or may not qualify, depending on the lender.
- Don’t count on the bonus to cover closing-day expenses without checking delivery — it may be two to five months at some (intentionally?) slow lenders.
- You must qualify for the mortgage — obviously.
- Non-prime borrowers are seldom offered cash back.
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