When we bought our home, we first went to our local bank to arrange a mortgage. The bank offered us 1% off their posted rates for being “valuable clients”. However, Invis, a mortgage-broker who can arrange a mortgage from many sources, was able to offer a mortgage 25 basis points less than the “best rate” from our bank.
For a hypothetical example of a $150,000 mortgage with a 5 year fixed-term, amortized over 25 years, a 4.8% mortgage will be about $2300 cheaper over 5 years than a 5.05% mortgage.
A lower interest-rate should not be the only consideration in a mortgage. Banks may offer to set-up a secured line of credit along with a mortgage. They may offer better pre-payment terms. However, it is wise to shop around and haggle a little bit and put some extra cash in our pocket.