Why you should always research financial products

Most Canadians would confidently state that they compare pricing when shopping for a flight or a hotel, but a new survey shows that many Canadians won’t do the same when it comes to financial products.

This is really troubling, when you consider that this accounts for things like mortgages, credit cards and insurance products. This lack of due diligence is also costing Canadians a lot of money.

“The massive gulf between Canadians who compare travel options and financial products is disappointing. Because the latter is where you save real money,” says Justin Thouin, our CEO and co-founder.

This is a big gap compared to the amount of research that goes into flights and hotels. It’s not a stretch to say this lack of research is costing Canadians, collectively, millions of dollars a year. We’re leaving a lot of money on the table. [LowestRates.ca]

The research found that most Canadians will simply consult one source, their bank, and take the first thing they are presented with. The problem is, the difference between a two per cent or three per cent interest rate (for example) can be a substantial financial difference.

• 47 per cent of Canadians do research before getting car insurance
• 45 per cent of Canadians do research before getting a credit card
• 60 per cent of Canadians do research before getting a mortgage
• 42 per cent of Canadians do research before renewing a mortgage

Notably, baby boomers are actually falling way behind on this, at less than 40 per cent doing research on financial products. However, millennials do hit better in some areas:

• 52 per cent of millennials do research before getting car insurance
• 50 per cent of millennials do research before getting a credit card
• 48 per cent of millennials do research before getting a mortgage

Millennials are clearly lacking when it comes to mortgage research however, which can add up to the biggest losses.

When you’re buying a financial product, you’re looking at something that is going to continue to cost you fees and interest for many years. Saving money on mortgages really add up over time. The difference between getting a 2% or 3% interest rate over your term or is quite substantial — it’s $10,000 a year, in fact. [LowestRates.ca]

Always do your research before you commit to any financial products or loans. And especially so when looking for a mortgage, you want to do your research and find a good rate and term that works for you. This is also where a mortgage broker can be a great ally, since they are not tied to one specific rate or option like banks can be. If you have questions about mortgages, please contact me.

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