Equitable Bank Mortgage Review 2024

Equitable Bank offers fixed and variable-rate mortgages, reverse mortgages, refinancing, and other mortgage options at some of the best rates in Canada.

Loan Types

• Fixed-rate Mortgages: Keep your interest rate locked in and get consistent monthly payments for up to 10 years.
• Variable-rate Mortgages: Follow interest rate changes and potentially take advantage of upcoming interest rate cuts. Remember that if rates go up, so do your mortgage payments.
• HELOCs (Home Equity Line of Credit): Take advantage of your home’s equity by opening up a line of credit based on how much of your home you have paid off.
• Reverse Mortgages: Turn your home equity into cash for greater financial versatility and potential opportunities.
• Short-term Mortgages: Consumers can opt for six-month or one-year mortgage terms instead of five- or ten-year terms, though not all consumers may be eligible.
• Commercial Mortgages: Mortgages for business owners looking to open a physical location.

Loan Minimum

Equitable Banks’ EQB Evolution Suite Mortgage products require a minimum loan amount of $75,000. Other mortgage products, such as its standard three-year and five-year fixed-rate mortgages, do not display a minimum loan required.

Loan Maximum

Equitable Bank does not disclose any maximum loan amounts.

Loan Servicing

Equitable Bank services their own loans, meaning you will deal with them throughout the lifetime of your mortgage—unless you switch your mortgage lender.

Equitable Bank has a bevy of mortgage products for Canadians at all stages of life. Its products are best for:

• First-time homebuyers or Canadian newcomers looking for highly competitive rates.
• Homeowners seeking to refinance at competitive rates.
• Homeowners looking to take advantage of their built-up home equity with a reverse mortgage or HELOC.
• Borrowers that want their individual financial situations taken into account.

To begin the mortgage application process, you’ll need to contact a mortgage broker on your own or through Equitable Bank’s website. Once you have a mortgage, or if you already have one and want to review its details, you can log in to your myEquitable online account. Closing timelines are based on a case-by-case basis once an Equitable Bank mortgage specialist has reviewed your mortgage application.

Unfortunately, Equitable Bank does not provide much information regarding its borrower requirements. That said, here is what Forbes Advisor Canada found. If you’re looking for detailed information, it is best to contact a mortgage broker or Equitable Bank representative with further questions.

Minimum Credit Score

Credit score requirements are not shown for standard variable and fixed-rate mortgages. However, Equitable Bank’s EQB Evolution Suite mortgages generally require a credit score of 650 or more. Equitable Bank’s reverse mortgages are offered to consumers with bad credit histories, but the lender does not provide exact numbers on its site.

Minimum Down Payment

Equitable Bank does not list minimum down payment requirements on its site. For more information, please contact a customer service representative or mortgage broker.

Maximum Debt-to-Income (DTI) Ratio

Equitable Bank does not indicate the maximum DTI ratio it allows for its standard mortgage products. Its EQB Evolution Suite mortgage generally allows for a gross debt service ratio (the cost of housing compared to income) of 39%. Consumers are also eligible with a total debt service ratio of 44%—the ratio of your housing costs and all other debts compared to your income.

All mortgages come with fees to be aware of. Here are the most common fees for getting a mortgage with Equitable Bank.

Prepayment Penalties

The exact prepayment penalties on a standard mortgage will be laid out in your credit documents from Equitable Bank—they aren’t public information currently. An EQB Evolution Suite mortgage generally has a prepayment penalty of the greater of three months’ interest or the interest rate differential for fixed mortgages. For variable-rate mortgages, expect to pay three months’ interest.

Setup Fees for Reverse Mortgages

Should you decide to get a reverse mortgage with Equitable Bank, you will pay a one-time setup fee of $995.

Real Estate Lawyer Fees

An attorney is a major boon when dealing with complex mortgage documents. When getting a mortgage or refinance, expect to pay around $750 to $1,500 in lawyer fees.

Administrative Fees

Though their exact amounts are not indicated, Equitable Bank charges various administrative fees for the paperwork and other clerical work required when preparing mortgage documents.

Unlike other mortgage providers, you need to contact a mortgage broker to get a mortgage with Equitable Bank. If you aren’t sure where to get started, a broker will ask you questions about your mortgage goals and financial circumstances to find a product that works best for you.

As the mortgage approval process moves forward, a broker communicates with the lender to ensure they have all the needed documents for an application (e.g. pay stubs, credit history). They also work with your lawyer to ensure mortgage instructions get into their hands quickly.

Approval, Underwriting and Closing Timeline

Equitable Bank does not indicate specific timelines for its mortgage approval, underwriting, and closing processes, stating that they vary case by case.

That said, you should allow for at least 30 days from the initial contact with a mortgage broker for your mortgage to close. This allows the lender time to approve your application, gather all the required documents, underwrite the loan, and fund it. If you need a mortgage sooner than 30 days, indicate that when you first contact your mortgage broker. They can advise you on the next best steps and ensure Equitable Bank knows your situation.

Though Equitable Bank does not list exact qualifications for many of its mortgage products, there are some general guidelines you can follow to ensure your chance of qualifying is high.

For starters, ensure your credit score is at least 660. This shows lenders you are responsible for your debt and are not a high-risk consumer. Another important point is keeping your gross debt service ratio (GDS) and total debt service ratio (TDS) at or below 39% and 44%, respectively. Your GDS is the ratio of your housing costs to your gross household income, whereas your TDS is the ratio of all your debts (including housing costs) compared to your gross household income.

Finally, ensuring proof of a stable income is also important. If you’re self-employed, lenders typically require proof of two years of income before considering you for a mortgage. If you’re an employee, having a stable income source for two years or more is also a good idea before applying.

What to Do If You Get Turned Down

Should Equitable Bank turn down your mortgage application, consider doing the following:

• Ask for specific feedback: While it may be tempting to leave bad news lying, following up with the lender about why you were turned down can give you key insights.
• Improve your credit history: Banks and major lenders prefer lenders with a credit score of 660 or higher. Work on paying down your debts and making your credit card payments on time to improve your credit score.
• Review other lenders: Because you had to contact a mortgage broker to start your mortgage application, touch base with them again to find other alternative lenders that may give you a better chance at success.
• Improve your financial health indicators: A common reason mortgages fail is high total-debt service ratios or gross-debt service ratios. Improving your income or lowering your overall debt can reduce both of these ratios to more appealing percentages.

Though Equitable Bank ranks as one of the best mortgage lenders in Canada, it might not be the best option for you. While this lender has competitive rates for Canadians with less-than-ideal credit histories, you may be able to secure better rates at different A lenders. Take a look at how Equitable Bank compares to other key players in the mortgage space.

Nesto Inc., an online-focused mortgage lender, has much lower rates than Equitable Bank: its five-year fixed rate is 4.54%, whereas Equitable’s is 6.09% for standard mortgages and 5.09% for EQB Evolution Suite products. Though both lenders are below the national average, Nesto’s rates are clearly better.

That said, Equitable Bank has a leg up on Nesto when it comes to unique product offerings. It is one of the few banks in Canada that offers a reverse mortgage. However, Nesto has a wider range of mortgage terms available to its customers.

However, Equitable Bank may be a better choice for Canadians with less-than-ideal credit histories. Nesto requires a credit score of around 680 to qualify for its products, whereas Equitable Bank has a looser eligibility structure geared towards newcomers and those with below-average credit scores.

Known for its Neo Secured Credit Card, Neo Financial came onto the mortgage scene as an online-only lender. Like Nesto, its rates are lower than Equitable Bank’s: Neo offers a five-year fixed rate of 4.84% on high-ratio mortgages.

Equitable Bank’s products can be accessed by more Canadians, however, as it offers mortgages in all 13 provinces and territories. Neo does not offer mortgages in Quebec, Yukon, Nunavut, or Northwest Territories.

Neo’s mortgages are offered on a case-by-case basis and have a pre-qualification process that can take minutes. Because Equitable Bank uses brokers and has no online process, some users may find its process more tedious—others may enjoy the additional human interaction that a broker brings.

Neo provides even less information on its mortgages than Equitable Bank does, and Equitable Bank appears to offer more mortgage products than Neo: it offers HELOCs, reverse mortgages, and potentially more mortgage terms.

BMO is one of Canada’s largest Big Six banks and a well-known mortgage industry leader. Its rates reflect that. Currently, BMO offers special rates on three-year and five-year fixed mortgages of 5.39% and 5.29%, respectively. If you have default CMHC insurance, you can get a better rate on a five-year fixed mortgage of 4.84%. Those rates are special and offered for a limited time, so they likely require borrowers to have some haggling power (i.e. solid credit score, good debt ratios). That said, BMO’s standard rates are slightly higher than Equitable Bank’s: BMO’s three-year and five-year fixed mortgages are 6.95% and 6.79%. Equitable Bank’s Evolution Suite mortgage rates are well over 1% less.

In terms of eligibility, BMO is a standard A lender, which means borrowers need an established credit score to qualify—though the exact number is not specified. However, BMO’s application process is much more versatile than Equitable Bank’s, as borrowers can apply online, in person, or call a contact person. Equitable Bank requires its customers to contact a mortgage broker to get started.

In terms of offerings, Equitable and BMO offer similar products, as BMO also offers HELOCs. Again, Equitable offers reverse mortgages, and BMO does not. However, BMO currently has an attractive $4,000 cash-back offer on select mortgage products until June 30, 2024.

Like many other major lenders, Equitable Bank offers refinancing for its customers. Equitable Bank provides little information about its refinancing rates, but they are competitive considering its mortgage rates compared to the other lenders above.

To begin the refinancing process, customers must reach out to a mortgage broker, just as if they were applying for a new mortgage.

With some lenders now going entirely digital, finding a mortgage lender has never been easier. But that also means learning how to evaluate lenders is even more important with Canadians’ wide variety of options. Here are some key criteria for choosing the best mortgage lender for you.

Affordability

The cornerstone factor when looking at mortgage lenders is rates. After all, if you can’t afford it, you shouldn’t purchase it in the first place. Many lenders lay out their interest rates and annualized percentage rates (APR) on their sites, letting you see how much you can expect to pay over the life of your loan.

Though one lender may offer a lower interest rate, they may charge other fees that increase the total cost of the mortgage. Make sure to compare fees from each potential lender closely with interest rates. Also consider closing costs (typically 1% to 4% of a purchase), lawyer fees, home inspection fees, and other tangential costs you will pay upfront.

Accessibility

Though affordability is important, accessibility is equally a priority for most. Comparing lenders’ mortgage approval processes can give you an idea of how smooth they will be and how long they will take. As a rule of thumb, fully online lenders usually have a faster application process, whereas banks that require in-person or broker collaboration do not.

That said, accessibility sometimes comes with the trade-off of less information. For example, Equitable Bank’s process requires you to work with a mortgage broker from start to finish. While that is time-consuming, you get much more information and guidance throughout the entire process. An online-only application can give you information, too, but you may have to do the legwork yourself.

Borrower’s Experience

Your experience with a mortgage lender is also a key part of your mortgage journey. Receiving helpful customer support, guidance while signing documents, and ongoing information throughout your mortgage term can reduce the stress of taking on a large financial burden.

Make sure to review a lender’s Trust Pilot reviews, Better Business Bureau (BBB) rating and accreditation, and ask friends and family for their honest take on them, too. The more information you have on how lenders treat borrowers, the better.

Forbes Advisor scores lenders based on criteria that have a meaningful impact on the cost of the mortgage, including borrower eligibility requirements, the variety of loan options and whether the lender had loan features that could affect the homebuying process either positively or negatively, such as prepayment privileges, a bona fide sales clause or whether a mortgage broker could act on your behalf with the lender once your mortgage is active (broker privileges).

The best lenders scored the highest based on the weighting in the following categories:

• Interest rate: 20%
• Loan options: 15%
• Timeliness: 15%
• Bonafide sales clause: 5%
• Broker privileges: 5%
• Prepayment privileges: 10%
• Penalties calculation type: 15%
• Customer service experience: 15%
• Lender discounts offered: 5 bonus points

Our focus on affordability, accessibility and key features that affect the homebuying process (like pre-approval time and closing time) is what we consider reflective of consumers’ top priorities when comparing mortgage lenders.

Lenders that don’t publicly display their interest rates online or operate in fewer than four provinces or territories were not eligible for review.