Quest Mortgage Rates & Reviews
What You Should Know
- QuestMortgage offers convenient online mortgage pre-approval valid for 120 days.
- QuestMortgage offers competitive mortgage rates in Canada.
| Term | QuestMortgage Rate | Canada's Lowest Rate |
|---|---|---|
2-Year Fixed | 6.34% $2,641/mo | - |
3-Year Fixed | 5.69% $2,486/mo | - |
4-Year Fixed | 5.39% $2,416/mo | - |
5-Year Fixed | 5.09% $2,347/mo | - |
The rates shown are for insured mortgages with a down payment of less than 20%. You may get a different rate if you have a low credit score or a conventional mortgage. Rates may change at any time. false
| Term | QuestMortgage Rate | Canada's Lowest Rate |
|---|---|---|
3-Year Variable | 6.30% $2,631/mo | - |
The rates shown are for insured mortgages with a down payment of less than 20%. You may get a different rate if you have a low credit score or a conventional mortgage. Rates may change at any time. false
Questrade Financial Group
Questrade was founded in 1999 as an online broker with its headquarters in Toronto, Ontario. Questrade Financial Group’s CEO is its cofounder Edward Kholodenko. Questrade grew fast by offering to execute trades for a much lower fee compared to traditional brokers. For example, it charges no annual fee for registered accounts, lets you buy ETFs for free and performs online orders for 1 cent per share (each trade would cost between $4.95 and $9.95).
Later it expanded into wealth management through the robo-advising service offered by Questwealth. The business strategy of Questrade Financial Group in wealth management is similar to that of its brokerage business. It uses automation to lower costs and take market share by charging less.
Questwealth manages its customers' portfolios for a fee of 0.25% per year. This fee is much lower than the fee for investment advisors. Investment managers in Questwealth construct and actively manage a few portfolios. Each investor is assigned to one of these portfolios based on their risk tolerance and time horizon. Their main competitor in wealth management is Wealthsimple.
In 2019, Questrade acquired Community Trust Company which has been operating since 1975. Community Trust offers residential mortgages, savings accounts, and GICs. They provide a unique GIC where the saver decides the maturity of their GIC. At the time of writing, their 1 to 5-year GICs offer competitive rates between 4.6% to 5.02%. The exact rate depends on the length of the GIC, tier, and account type. GIC’s tier refers to its size. Community Trust often pays a slightly higher rate to larger GICs.
Quest Mortgage
Recently, Questrade Financial Group offered a product called QuestMortgage, which provides residential mortgages to prime borrowers. Their advertised rates are very competitive, but those are the minimum rates offered. The exact rate offered to you might differ based on your specific profile. Fortunately, it is easy to know your precise rate by applying for a preapproval on the Questrade website.
You can click on the apply now button in the top right corner of the QuestMortgage web page to start your pre-approval process. If you have an account, you can sign in and proceed. Otherwise, Questrade will ask for your name, email address and phone number and create an account for you.
Alternatively, you can choose whether you want to purchase a home or whether you want to renew your mortgage in the middle of the page. The system would assess your situation with a series of questions and would check your eligibility for a Questrade mortgage at the end.
If you qualify for a Quest Mortgage, a rate is offered, and if you agree to the rate, the system issues a preapproval. This preapproval will be valid for 120 days, meaning that you are locking in your mortgage rate for 120 days.
If you are looking at a variable rate or an adjustable rate mortgage, the preapprovals use is limited to signalling your seriousness to sellers and real estate agents. On the other hand, If you are looking at fixed-rate mortgages, then your preapproval is a valuable call option on mortgage rates. A call option is a financial instrument that gives the option but not the obligation to purchase something at a specified price by a specified date.
A pre-approval is an option because you would only use it if the rate has increased after you got your preapproval and before you finalize your mortgage approval. If the rate has decreased, you simply ask your lender for the current rate when finalizing your mortgage.
Quest Mortgage’s office is in Ontario, but its services are available in all Canadian provinces except the Province of Quebec. The Canadian mortgage industry is very competitive, and Quest Mortgage has to compete with Nesto and HomeWise, among many other players.
Fixed vs. Variable rates
A QuestMortgage fixed-rate mortgage is advantageous if mortgage rates increase after you take out a mortgage. A QuestMortgage variable rate mortgage is beneficial if mortgage rates decrease after you take out a mortgage. Like other interest rates, mortgage rates are composed of a risk-free rate plus a risk premium. The risk-free rate is the yield on a comparable government of Canada bond yield. For example, the risk-free rate for a 5-year fixed rate mortgage is the government of Canada's 5-year bond yield.
Government bond yields are mostly affected by the policy of the Bank of Canada. In Canada, the Bank of Canada is independent and mandated to keep price stability. It targets a 2% inflation in the Consumer Price Index. As a result, you can expect interest rates to follow the inflation rate. So you can reasonably expect rates to rise after a rise in inflation and rates to fall after a decline in inflation. Yet predicting inflation over the medium term is very difficult and almost impossible over the long term.
Prepayment Privilege
Similar to HSBC Bank Canada mortgages and RFA Mortgage Corporation mortgages, Quest Mortgage offers a prepayment privilege equal to 20% of the original mortgage balance per year on its closed mortgages. This prepayment privilege is more generous than most other Canadian lenders offer on their close residential mortgages.
Subprime Mortgage
While Quest Mortgage is directly offering prime mortgages to Canadian consumers, Questrade Financial Group, through its subsidiary Community Trust Company, offers subprime mortgages. Subprime mortgages are not directly provided to consumers but marketed through mortgage brokers.