Purchasing a home isn’t as stressful as you think
By offering the lowest rates in town, HSBC is helping people mortgage their homes without mortgaging their lives
Since 2018, Canadian homebuyers have been required to undergo a financial “stress test” to ensure they can continue making their monthly mortgage payments in the event that interest rates increase. This stress test applies to both insured homebuyers (those putting down less than 20 per cent) and uninsured buyers (those putting down 20 per cent or more). Even current homeowners are now required to undergo a stress test if they want to take out a homeowner line of credit, refinance their existing mortgage or switch their mortgage to another lender.
The “stress” in “stress test” relates to a homebuyer’s finances, but for many of us, buying a home can feel personally stressful as well. That doesn’t need to be the case.
One way to mortgage a home without mortgaging too much of your lifestyle is by saving for a down payment early—if you only start thinking about buying a home when you start looking for one, you may find you’re not ready. Another way is by taking out your mortgage with trusted professionals who will offer you a low rate and be there to answer your questions and concerns.
We reached out to financial institution HSBC to talk about how they’re leading the way in reducing stress for future homeowners.
“Buying a home is an important purchase,” says Barry Gollom, HSBC’s Senior Vice-President of Products and Customer Experience. “By offering mortgage rates already below the top five banks’, HSBC takes a lot of the personal stress out of a mortgage stress test.”
HSBC further sets itself apart from other financial institutions by taking a “no-haggle” approach to mortgage rates, Barry Gollom told us. At HSBC, the rate you’re quoted is the rate you receive—something, he adds, that applies to HSBC’s entire suite of financial services. Offering the lowest possible rate upfront not only speeds up the process of applying for a mortgage, but it also makes the overall experience less stressful, whether you’re taking out your first mortgage or have been around the home-buying block a few times.
“People aren’t leaving the branch thinking, ‘I’m not comfortable negotiating. Did I get the best price? Did I haggle hard enough?’ Why put someone though that stress when they’re already looking at a significant life investment?” Barry Gollom says. “And if someone does like to haggle, once they go out and shop around after seeing our rate, we’re often successful in earning their business. Very few of our mortgages get exception pricing—and our average approval ratio is 82 per cent.”
One thing that can cause us stress when we shop for a mortgage is feeling rushed to accept a good rate before it expires. That’s why HSBC offers pre-approved mortgage rates for 120 days. Another thing that can be stressful is all the little costs of owning a home that tend to pinch our pocketbook. HSBC removes one of those costs by offering free day-to-day banking for most eligible mortgages. “That monthly sting that you might feel with your current bank,” says Barry Gollom, “that’s not felt at all with HSBC.”
When some of us are looking to buy a home, we might opt to use an accredited mortgage professional, or mortgage broker, to negotiate our mortgage. Mortgage brokers can often negotiate low rates and a quick turnaround due to their established relationships with banks and other financial institutions, and their commission is paid by the institution that ultimately provides their client with a mortgage. But that commission is usually based on the length of the mortgage—the longer the mortgage term, the bigger a broker’s fee—which means a homebuyer could end up with a mortgage that serves their broker’s interests more than it serves theirs.
HSBC has its own team of dedicated mortgage professionals who are able to adjust quickly to market conditions, rule changes and competitive markets nationwide. “Our mortgage team is made up of very seasoned, passionate people, each with an average of 10 years of mortgage experience,” says Barry Gollom. “They don’t work on commission, which is a little bit uncommon in the market, and we’re happy if they spend 10 minutes or an hour or more talking to a customer. Our customers can feel secure knowing they’re dealing directly with a respected financial institution.”
Barry Gollom says HSBC’s primary focus is providing strong customer service—reviewing their customers’ full situation and working toward a collaborative, comprehensive, long-term solution that will set customers up for financial success. “It’s important to surround yourself with experts—your banker, your real estate broker, your accountant, and friends and family you trust,” Barry Gollom says. “HSBC hopes to earn the right to be a part of that group for our clients. We look at first-time homebuyers’ full financial pictures, not just their mortgages. We think it’s important to discuss their personal goals and their financial goals, and the home-buying experience is a big part of both. We simply want the right to earn their business.”
A lot of things stress us out when it comes to buying a home. So it’s good to know we can reduce some of that stress—especially when it comes to taking out a mortgage—with help from a partner like HSBC.
To find out more about how HSBC can help you mortgage a home, visit hsbc.ca.