- Welcome back. it's Nolan Matthias for Mortage360.
And today we're continuing our series on the best bank
in Canada to get a mortgage or more specifically
in this case,
the best non-bank.
'Cause what we're gonna do is we're gonna put
the three biggest non-banks in Canada,
head to head against each other,
to figure out which one is the best option
for non-bank options,
and then, coming up in a future video
in the next couple of days here,
we're gonna put Scotiabank,
the winner of our best bank in Canada video,
against whoever the winner is today.
And we're gonna put them head to head
and see who takes the cake for the best lender in Canada
to get a mortgage.
But before we get into it,
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Okay. So let's get into it.
Let's talk about the best non-bank lender in Canada.
And here's the thing about non-bank versus bank lenders.
Non-bank lenders are typically more competitive
in their product offerings.
They have better mortgages, better products,
because they can't skate on the reputation.
They can't skate on that,
royal bank branding.
They have to have something that is actually better than
the big banks.
These lenders,
non-bank lenders take up to about 35 to 40%
of the market share depending on the year.
So they aren't small lenders either
and they aren't a small piece of the market.
And they're doing prime business.
So, A grade, first class, first time home buyers,
second time home buyers,
third time home buyers,
fourth time home buyers,
fifth time the home buyers,
the best of the best clients in the country
are often finding themselves to non-bank lenders,
because like, I said,
the product is simply more competitive.
The things that make them more competitive,
one is, you don't have to go in
and fight with them yourself (bell ringing)
in order to get a mortgage from them.
Most often, you can use a broker who can represent you
and fight with them on your behalf in order to get
the best rate.
Number two is they often have significantly lower penalties
than what the big banks offer.
So if you need to get out of the mortgage
or if you want to lower your rate
or get into a different product,
it becomes cheaper to do that.
You have more flexibility and therefore more options,
which often leads to saving money.
And quite often they even have additional features.
Things like home warranties,
where if the water heater craps out
or if furnace stops working,
or if one of your appliances explodes (loud explosion)
you can get that replaced at a very reasonable cost.
Because you simply selected a mortgage provider
that needed to have that extra product,
that extra feature,
that is a benefit to you in order to get you
to actually take it versus that,
comfortable bank mortgage that you would normally take.
You will also get the same added benefits
of the Canadian Regulation System.
So these companies are regulated just like the banks are.
They have the same rules, same guidelines,
especially if they're doing insured mortgages.
And they're ultimately some of the safest lenders
in the world because of that Canadian framework.
Because what makes a Canadian bank super safe
and super reliable,
isn't so much the banks themselves,
it's the regulation that Canada has in place to protect you
the consumer as a Canadian.
And these non-bank lenders have that same protection
for you that the big banks have.
They also do one thing and one thing only.
Which is sell mortgages.
Which makes them better at doing mortgages
because that's all they do.
They aren't trying to sell you a credit card.
They aren't trying to sell you a line of credit.
They aren't trying to open you a bank account
or sell you investments.
This is the one thing they do
and they do it really, really well
because they're focused on it.
So, that's why a lot of clients end up choosing
non-bank lenders in order to get their mortgage.
So the three that we're gonna cover today
are MERIX, MCAP and First National.
These are kind of the three big players.
MERIX is actually owned by a company called Paradigm Quest.
Which is the company that backs a lot of
the white label products in the country.
So if you've got a mortgage
with a place like Mortgage Alliance
or Dominion Lending Centers or Vera Code
or MERIX or Lendwise
or any number of other companies,
Manulife is another one of them.
There's a good chance that Paradigm Quest is behind
that mortgage.
But their primary lender is what is called MERIX Financial.
And MERIX was actually a game changer in the industry
because they were one of the first lenders to come out
and offer mortgage brokers, trailer fees.
Which is why a lot of mortgage brokers encourage
their clients to use MERIX Financial.
MERIX also takes really, really good care of clients
on renewal,
offering them whatever their lowest rate is at the time.
Which means in five years when your mortgage comes up
for renewal you don't have to apply at another place,
go to a different lender,
sign a whole bunch of documents.
MERIX will basically just say,
"here, this is our best rate,
"We're gonna take care of you,
"sign the dotted line and away you go."
Now using our criteria from the best bank in Canada video,
the criteria about how fast they will let you pay
off your mortgage
and ultimately how little interest they will allow
you to play,
all of these lenders do very, very well in this category.
They all have great prepayment privileges.
MERIX's is for example is 20% prepayment privilege,
from a lump sum perspective.
So you can pay 20% of the mortgage off any time.
You can also increase your payments by 20% per year.
Now MERIX has one little quirk,
and that is if you combine these two options together,
they cannot exceed 20% of the original mortgage amounts.
So you can basically use one or the other or both,
but you can't pay off more than 20%
of your mortgage per year.
The other two lenders that we're gonna talk about are
a little bit different they allow you to go beyond that.
Second lender we wanna talk about is MCAP.
And MCAP is arguably one of the biggest lenders
in the country.
They also have a secondary company called RMG.
Both of those companies operate
with similar mortgage products.
Both of them have no-frills products.
In fact, all these lenders have no-frills products.
You have to understand the difference between
a discount mortgage and a non-discount mortgage.
In this video we're gonna talk about the regular mortgages,
not the discount mortgages.
And oftentimes when you see a really, really,
really low rate published,
it's coming from MCAP.
They are probably the leading lender when it comes
to low rate discount mortgages in the country.
And they do a huge volume because
now MCAP has some really great prepayment privileges.
You can pay 20% lump sum
or increase your payments by 20% per year,
or you can do both.
So if you increase your payments by 20% in year one,
and then another 20% in year two,
and then another 20% in year three,
there's no limit to how much they will let you increase
your payments,
and also use your lump sum payments.
That's in contrast to MERIX,
which limits it to 20% of your original mortgage amount.
MCAP is also an innovator when it comes to products.
So they're one of the few monoline lenders
or mortgage specialty lenders in Canada,
that has lines of credit.
They also have the cashback mortgages
that are so often popular,
and they're a leader in the industry.
Usually they are of the first movers when it comes
to lowering rates
or when it comes to creating an innovative and new product.
Most of the lenders follow what MCAP does.
And that's great for the consumer,
because what that does is it creates more choice.
And when you can get a banklike mortgage from
a lender like MCAP,
that's a really good thing because ultimately,
you're getting advice from broker,
you're going to be allowed to have
the broker make changes for you throughout the mortgage,
and you're probably gonna have lower penalties
and an overall lower cost of borrowing.
But when you look at our criteria of the best lender
in Canada being the lender that will allow you to pay off
the mortgage the fastest
and pay the lowest amount of interest,
MCAP isn't quite the winner.
They're close.
They're amazing.
They're close, but not quite there.
The non-bank lender that in our opinion
is the number one non-bank lender to get a mortgage from
in Canada is First National.
They are an exceptional lender
and they have very similar prepayment privileges
to that of Scotiabank,
which won our bank battle.
So to go back and remind you what those features are,
you can pay off 15% in a lump sum every year
without penalty,
you can increase your payments by 15% per year,
and they have that magical double up payment.
That payment that allows you to double any payment you like
at any time,
which ultimately is the number one factor when it comes
to paying off your mortgage as fast as possible.
In fact these mortgages with Scotiabanks,
and First Nationals,
are the only mortgages in Canada where
you can reasonably pay off your mortgage in four years.
The other thing we love about First National,
at least in Alberta and the Prairie's,
this isn't true across the country
'cause there's different underwriting centers,
and different lenders operate well in different areas.
But in Alberta, Saskatchewan, Manitoba,
First National is the fastest When it comes to underwriting,
they make the most common sense decisions.
And it's just an easier process than getting
a mortgage anywhere else.
And full disclosure.
Most of the mortgages that we do in our company,
end up going through First National
because of that ease of use,
because of how competitive they are
with their interest rates,
and because of how good the product is.
They're quite simply the best non-bank lender in Canada.
That being said,
if you're getting a mortgage at MCAP,
if you get a mortgage at MERIX you cannot go wrong,
but we just think First National edges them out
just a little bit.
So, First National,
best non-bank lender in Canada.
In the next video we're gonna put Scotiabank
and First National head to head.
We're gonna talk about why you would choose a bank over
a non-bank lender.
And why you would choose a non-bank lender
over a bank lender.
And the answer is it's different for everyone.
And we're gonna explain why in the next video.
So if you found this information interesting,
if you found it useful,
if you've had it any of the above,
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