How much is bank loyalty really costing you?
If you’ve been with your current bank for longer than you can recall, you’re not alone; according to survey research from FICO, 69% of Canadians have been with their primary lender for more than a decade.
That stagnancy is due in part to Canada’s uniquely homogenous consumer banking landscape. Unlike south of the border, where there were nearly 4,000 commercial banks as of the end of 2024, there are fewer than 80 on Canadian soil. Of these, the vast majority – a whopping 75% – of consumer business is concentrated within the “Big Five”.
This sows fierce loyalty among consumers to their chosen bank brand – but it also breeds complacency in terms of money management. Unlike other big-ticket purchases, where consumers will shop around for the best deal, the same logic doesn’t seem to apply when it’s time to select a new bank account, mortgage, or insurance policy. And, according to a new study by Ratehub.ca, that blind loyalty is costing Canadians a considerable chunk of change – in some cases, thousands of dollars.
“Every single person, regardless of their financial situation, benefits from shopping around when it comes to their financial products,” says Naga Parvatharajan, CEO of Ratehub.ca. “Don’t just go with your family bank and expect to receive the best rate or best product.”
“Maybe you won’t find a better rate, but you won’t know unless you look. You only stand to benefit from researching and exploring the market. By doing so, you’re actively learning more about the products you have or may need in the future... Whether you’ve just received your mortgage or insurance renewal letter, or whether your bank has offered you a new product like a credit card or personal loan, it’s crucial to check the market. Make sure you’re not only getting a competitive rate, but also choosing a product that fits your needs.”
The study breaks down the potential savings Canadians could access by switching to the best-priced banking product on the market. Here’s how that breaks down across mortgages, credit cards, and bank accounts.
Mortgage borrowers could save $1,860 annually
Whether you’re on the house hunt, or are an existing homeowner who needs to renew your current mortgage term, there is a strong incentive to explore your rate options at multiple lenders. To illustrate this, Ratehub compared the monthly payments a mortgage borrower would make based on 4.49% (the average five-year fixed rate offered by the Big Five banks), to 4.04% (the lowest available on the market today), based on the following assumptions:
- Home price: $672,784 (national average - July 2025)
- Down payment: 10%
- Amortization: 25 years
- Total mortgage amount: $624,277
- 5-year fixed rate
That 45-basis point difference makes a big impact. According to Ratehub.ca's mortgage payment calculator, if this borrower accepted the 4.49% rate offered to them, their monthly mortgage payment would be $3,452. However, if the borrower shopped around, they could secure a lower rate available, 4.04%, making their monthly payment $3,297.
That’s a difference of $155 more per month or $1,860 more per year. Over the five-year term, this adds up to $9,300 that could have stayed in this borrower's pocket.
“A mortgage borrower could get a renewal offer that looks good on paper, but without the context of the current interest rate environment as a whole, you could be leaving money on the table,” says Parvatharajan. “Even a quarter percentage point difference in your mortgage rate can have a significant impact on your monthly payments and the total amount of interest you’ll pay over time.”
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Credit card holders could earn $517 more
The Canadian credit card landscape is crowded with options, from cards stuffed with luxurious travel perks, to grocery and gas points, to no-fee and low-interest options.
Banks make it easy to choose from their in-house suite of cards, and markets them vigorously to existing account holders. While it’s tempting to just go with what your bank offers you, exploring your options here can make a big difference. The best credit card will vary depending on the person and their spending habits, but to highlight the importance of shopping around, let’s look at two similar no-fee cash back credit cards.
With a spending scenario of $2,200 per a month, the card holder could earn as much as $684 in cash back in the first year – or as little as $167. That’s a potential difference of $517 within just one year.
Bank account holders can earn hundreds more – and ditch the fees
The same goes for everyday banking products like chequing and savings accounts. The average Canadian pays over $220 annually in bank fees – that's nearly $20 per month.
Savings accounts can have a wide range of interest rates. For example, the best rate on Ratehub.ca right now is 3.30%, while the average of the Big 5 Bank rate is 1.01%. Based on a $5,000 balance, you could earn $168 in the first year at 3.30%, compared to $51 at 1.01%.
The bottom line: Shopping around pays off
“Ratehub.ca is a one-stop shop for all your financial needs - Save, Spend, Borrow, Protect and Invest,” says Parvatharajan. “We will personalize our products to fit your needs. So you don't need to go anywhere else. We offer great product selection that you can get digitally at the convenience of your couch on your phone or laptop and we have the best agents to help you. We have the best content to help you make the best financial decisions. And we provide the best value for money.”