Posted Rate

A posted rate is the official advertised mortgage rate that a lender publishes publicly, typically higher than the rate most borrowers actually receive. In British Columbia, as elsewhere in Canada, lenders are required to disclose their posted rates, but the majority of borrowers negotiate a discounted or special rate below the posted figure. The posted rate remains significant because it is used in certain contractual calculations even when the borrower pays a lower rate.

When a borrower with a fixed-rate mortgage breaks their mortgage early, many federally regulated lenders calculate the Interest Rate Differential (IRD) penalty using the posted rate at the time the mortgage was originally issued, compared to the current posted rate for the remaining term. Because the posted rate is higher than the discounted rate the borrower actually received, this method can produce a significantly larger IRD penalty than borrowers anticipate. BC borrowers should review their mortgage contract carefully to understand exactly how their lender defines and applies the posted rate in any IRD formula.

Historically, Canada's federally mandated mortgage stress test required insured borrowers to qualify at the greater of the contract rate plus two percentage points or the Bank of Canada's conventional five-year posted rate benchmark. BC buyers seeking insured mortgages were subject to this federal rule, administered through the Office of the Superintendent of Financial Institutions (OSFI) for federally regulated lenders and through federal mortgage insurance rules. Buyers should consult current federal mortgage qualification guidelines and their lender, as the specific benchmark rate used in the stress test can change.

Under the Real Estate Services Act (RESA) and BCFSA rules, licensed real estate professionals in BC owe their clients duties of loyalty, disclosure, and competence, but mortgage financing terms such as posted rates fall within the specialized knowledge of mortgage brokers licensed under BC's Mortgage Brokers Act. A real estate licensee should refer clients to a qualified mortgage broker or lender for detailed explanations of posted versus discounted rates, rather than providing mortgage advice beyond their area of licensure.

The BC Property Transfer Tax (PTT) is calculated on the fair market value of the property at the time of transfer under the Property Transfer Tax Act, not on the mortgage rate or financing terms. PTT is charged at 1% on the first $200,000 of fair market value, 2% on the portion from $200,001 to $3,000,000, and 3% on the portion above $3,000,000, with an additional 2% on the residential portion exceeding $3,000,000. The posted rate or any discounted mortgage rate the buyer secures has no direct bearing on the PTT calculation.

The posted rate does not appear in standard strata disclosure documents such as Form B (Information Certificate), Form F (Certificate of Payment), or Form I (Rental Disclosure Statement) under the Strata Property Act (SBC 1998, c. 43). Strata documents focus on the corporation's financials, bylaws, contingency reserve fund, and any outstanding levies, none of which reference a lender's posted mortgage rate. A buyer's financing terms, including the rate they secure, remain a separate matter between the buyer and their lender.

Any use of a client's personal financial information, including details about their mortgage penalties derived from posted-rate calculations, for marketing purposes requires the client's informed consent under BC's Personal Information Protection Act (PIPA). Additionally, sending unsolicited commercial electronic messages containing such information would be subject to Canada's Anti-Spam Legislation (CASL), which requires express or implied consent, an unsubscribe mechanism, and sender identification. Mortgage brokers and real estate licensees in BC must comply with both PIPA and CASL when handling client data.

In British Columbia, mortgage foreclosure is a judicial process conducted through the BC Supreme Court under the Law and Equity Act and the BC Supreme Court Civil Rules, not a power-of-sale process as used in some other provinces. During foreclosure proceedings, the court may consider the outstanding mortgage balance and any accrued interest calculated in accordance with the mortgage contract, which could include penalties referencing the posted rate if the borrower is in default before maturity. The posted rate itself does not change the judicial foreclosure process, but it may affect the total amount the lender claims is owed.

The BC First-Time Home Buyers' Program under the Property Transfer Tax Act exempts eligible first-time buyers from PTT on properties with a fair market value up to $835,000, with a partial exemption phasing out above that threshold. Eligibility is based on factors such as residency, prior property ownership, and property use, not on the mortgage rate the buyer obtains. Whether a buyer is paying a posted rate, a discounted rate, or any other financing arrangement has no effect on their qualification for this PTT exemption.

Under the Wills, Estates and Succession Act (WESA), the deceased's estate passes to beneficiaries or heirs subject to all existing liabilities, including any outstanding mortgage obligations. The mortgage, whether at a posted or discounted rate, remains a charge against the property, and the executor or administrator must address it as part of administering the estate. Whether the lender will allow a beneficiary to assume the existing discounted rate or will require renegotiation at then-current rates depends entirely on the mortgage contract terms and the lender's policies, not on WESA itself.