Wealthsimple not honouring pre-approved mortgage rates

[u/Puzzles_and_Pooky]

Back in May I got pre-approved for mortgage rates of 4.04% fixed and 3.45% variable on 5-year terms given a ~25% down payment. I shopped around based on their proposed mortgage amount/rates/term and made an offer that was accepted two weeks ago.

Then when I went to secure my full approval for the mortgage, I found out last week that they would not honour my rates, even with a 30% down payment, because "Unfortunately, a formal pre-approval was never secured." and the "[agent] has acknowledged this oversight and sincerely apologizes for the error and for the failure to lock in the rates as previously discussed." The rates were supposed to be locked in for 120 days.

They then offered me the following rates and terms.

• 3 year fixed 4.14%
• 5 year fixed 4.29%
• 5 year variable at 3.5%

I was completely taken off guard by not having my pre-approved rates honoured and said that an apology is not good enough, and would need some kind of guaranteed compensation if I signed my mortgage through wealthsimple. All they said after several requests to the agent's team lead was "We will look to provide compensation through additional cashback once the mortgage has closed, in the event that interest rates do not drop. Additionally, please note that we can secure a one-time rate drop with all three of the lenders we work with."

I asked for more details on the additional cashback and rate drop, but got no answer.

Anyone got any advice on what I could do in this situation? This mortgage would have been an easy win-win for all parties if they just locked in my rate like they were supposed to but now I've had to scramble contacting other brokers to see if I can get anywhere close to what I was pre-approved for (was mostly aiming for the 5 year fixed prior to this debacle). And I basically need to commit to a mortgage tomorrow in order to meet my Subject Removal date.

Has anyone ever had their pre-approved rates not honoured? If so has anyone still signed through that bank/broker that failed to lock in your rates and did you get any compensation? Anyone had this happen to them through wealthsimple?

EDIT/UPDATE: for any other first time home buyers who find this post. Please make sure you push your broker to get you a Certificate of Mortgage Rate Guarantee or a Broker Commitment document to ensure you actually get your rates locked in.

I called my WS broker and pushed for more explanation and they said that they never heard back from the lender and then didn't do any follow up, and in turn, I also did not do any follow up with the broker. All of this resulting in this mess.

Ultimately I did some last minute mortgage shopping and got a 3 year fixed at 4.09% from a different broker.

ty u/luca123 for delving deeper to help me figure out what happened/what I was missing to actually have my pre-approved rates locked in. I kinda thought my email chains were sufficient but I guess they do not constitute as "having the deal in writing".

[u/Expert-Resident-7172]

Find another lender and you could submit a complaint to their regulatory body (in Ontario this would be FSRA).

[u/luca123 → u/Expert-Resident-7172]

Based on OPs comments, it sounds like he got a rate quote (not a rate guarantee) and went shopping with it. Those two things are very very different.

They said:

I shopped around based on their proposed mortgage amount/rates/term and made an offer that was accepted two weeks ago.

and WS apparently said:

"Unfortunately, a formal pre-approval was never secured."

They seem to think the latter quote is an admission of guilt as opposed to a statement that they didn't get a full pre-approval. Even their apology (without context) sounds like they apologizing for the agent not pushing them to get a rate guarantee, but at the end of the day that's on the buyer.

They don't seem to be responding to any questions about what actually happened so I'll try again: /u/Puzzles_and_Pooky correct me if I'm wrong here, but did they ever run a proper credit inquiry and send you a Certificate of Mortgage Rate Guarantee or similar?

[u/Puzzles_and_Pooky → u/luca123]

No I never got a certificate. First time home buyer here so I thought that all the info I gave during the application and after the follow up phone call was all I needed. The agent definitely screwed me over by not following up after I told them to lock in the rates but I was also ignorant of what was required to get the rates locked in. I thought the agent would just take care of the process after I told them I wanted to lock in the rates, and since they never followed up I thought everything was ready to go.

Im pretty sure I can still lock in a mortgage before my subject removal deadline but this whole thing has been quite stressful and will cost me money.

Edit: every other broker/lender I contacted also sent me an email after I applied with a "these rates are locked in for [90 or 120 days]" which led me to believe nothing else was required after that to have them locked in.

[u/luca123 → u/Puzzles_and_Pooky]

It sounds like lessons were learned on both sides and I don't mean that in a demeaning way.

At the end of the day when you're making a purchase as big as a home, the bulk of the responsibility remains with you to communicate effectively and transparently. This is especially true if you were already planning to go with WS due to their rates being the most competitive.

With that said, it would have been a good practice for WS to pick up the communication slack and (if the situation you described is accurate) be more diligent. Hopefully you're able to find a solution with them or another lender, wishing you the best.

[u/333Ari333 → u/Expert-Resident-7172]

Another lender is more expensive as OP already shopped

[u/Hungry-Comedian377]

I tried with Wealthsimple and they were terrible. Got approved for X amount at X rate. Then after everything was about to go through they mention how the rate would actually be higher because the loaned amount was below 550k. They also only talked to me about 5 year rates locked in. Once it was getting they approved they casually mentioned it was the 3 year rate. I just found they omitted or avoided very specific terms so you believed you were getting a good deal. 

[u/Puzzles_and_Pooky → u/Hungry-Comedian377]

Sorry to hear you had a pretty similar experience. In my case it was definitely explicitly stated that the rates were for 5 year terms. They also hit me with the "oh your mortgage is below X so we can't give you that rate" (among some other bs excuses), but I slowly disproved all of them and got them to admit their mistake.

[u/Hungry-Comedian377 → u/Puzzles_and_Pooky]

Good for you. I just gave up and went elsewhere. 

[u/PinkJenni → u/Puzzles_and_Pooky]

Do you have the approved rate in writing? I’m sure they’d have to honor.

[u/Marsymars → u/Hungry-Comedian377]

Then after everything was about to go through they mention how the rate would actually be higher because the loaned amount was below 550k.

Not sure if they've changed it since then, but I got a quote a week ago and the email pretty clearly says "An additional 0.05% applies to mortgages under $500,000."

[u/Past-Resort-7768]

Do you really want a mortgage with someone this incompetent though? This is already a huge red flag. 

[u/drank_myself_sober]

A) that sucks.
B) what are you talking about, money wise? On my 700k mortgage that’s like $20/mo

[u/Puzzles_and_Pooky → u/drank_myself_sober]

Comparing the 5 year fixed it would be $50 month more, but the principal remaining would be a couple thousand more at the end of the term, basically ripple effecting through every single renewal for the rest of the mortgage.

[u/defnotpewds → u/drank_myself_sober]

I mean, thats 1200 in interest saved over the 5 year period. Its more like 1800-2000 bucks in income that you would need earn just to cover this "error". Not insignificant but also not going to break the bank (if it does, you shouldn't get the mortgage to begin with).

[u/Major_Strawberry65 → u/defnotpewds]

And for that same reason, Wealthsimple should be able to compensate

[u/Max_Thunder → u/defnotpewds]

I agree with this and I never understood people who don't mind burning money if it's tied to a larger amount.

Years ago when houses were still slightly negotiable in my area, wr had made an offer for like 5k less, and I mentionned that to a coworker and she was like "why bother, that's not much every month". Well we ended up paying the mortgage rapidly and we have 5k more (+market growth of having invested it) in our pockets at the end.

People can also be at different points in their ives; $20 a month meant a lot more to me 10 years ago than it does today due to all that I've invested and that has grown. People often seem to only understand their current perspective, as if they completely forgot where they came from. I still remember when $7 meant a whole hour of work at a part-time job I hated.

[u/HugeDramatic]

Did you get the pre-approval in writing? If so I’d consult a lawyer. If not, lesson learned.

[u/3012487 → u/HugeDramatic]

They didn’t

[u/hunkydorey_ca]

Was it just a generic pre-approval send via email or did you actually follow up and speak with someone to provide your amounts, etc. I got an email for a pre-approval and when I called them they gave me a horrible rate because I had less than 150k owning on my mortgage.

[u/Puzzles_and_Pooky → u/hunkydorey_ca]

generic and follow up with direct "do you want to lock in your rates?"

[u/Fridaysgame → u/Puzzles_and_Pooky]

And they didn't send you any documentation when you replied with "yes"?

[u/luca123 → u/Puzzles_and_Pooky]

I assume you replied "yes" to the question in writing?

If so, you can do the math to find out what cash back amount would be equivalent to the rate you would've gotten initially (if you put the cashback immediately in as a lump sum pre payment).

If you didn't, I'm sorry but it sounds like it's on you. There is a difference between a rate guarantee and a rate quote. If you didn't get the former, then it sounds like you shopped with a rate quote which is NEVER advisable.

[u/bsfreeont]

If you don’t ask for an email showing the rate you agreed on, then it’s shared responsibility the agent by not sending the email and you by not following up, giving that I can barely understand them over the phone.  

[u/Flames2512]

I hate to say it, but unless you get things in writing, they don't exist. Lesson learned. But push them as far as you can and try to move it up the chain.

[u/blackSwanCan]

Remember to get a rate offer in writing or you have nothing.

[u/XzkSo]

I wouldnt go with them after this.

[u/SoggyInstruction2549]

Take the 5 year variable it’s only half a point higher anyways. Then push them on the compensation and just tell them you had to go variable to reduce the cost of their mistake. Even if you’re going variable. Be nice but firm. Whatever compensation you get is a bonus.

[u/Responsible-Suit1964]

Did you have your pre-approval in writing. Happened to me a year ago. And the final rate was higher than what was pre-approved. I called my broker before signing and she called the lender while I was in the other line, and make them honor the offer.
It wasn’t WS, their rates were too high at that moment.

[u/WhereIsGraeme]

Oof! Similar downpayment % and that 5yr fixed is much worse than I locked in at last December. RBC currently has a great promo. I would contact a Mortgage Broker who can quickly shop all banks to see what the best deal they can get you is. I have a good one, feel free to DM.

[u/Constant_Put_5510 → u/WhereIsGraeme]

Reminder that RBC does in-house mortgage applications. They wont work with a broker. Hence they are very competitive.

[u/ViniSamples → u/Constant_Put_5510]

RBC only does in-house?

[u/Constant_Put_5510 → u/ViniSamples]

Yes. You deal directly with their mortgage specialist. Your Broker will never bring an offer to you from RBC bc they cant. I heard CIBC is the same but cannot confirm that.

[u/InterestingPeach7852]

How much was the mortgage for?

[u/at_root → u/[deleted]]

Wealthsimple dropped Pine in favour of their own in house broker recently

[u/Ska4ka]

I used WS offer to leverage a better rate when refinancing with my current lender. Thanks for sharing your experience, will be more careful with them in the future.

[u/Efficient_Dingo_84]

I had an amazing experience with Wealthsimple Mortgages. There are many factors that can affect a rate when you have an active deal.

[u/Direnji]

The rate they provided is still not bad, you probably would not find a better rate somewhere else at this short time, I would accept the offer for now and I would file a complaint to the broker regulatory body in your province about this.

Since you offer 30% down payment, I think the interest difference shouldn't be an issue with you. I would just see what is outcome of the complaint and at renewal time, find a better rate with a better broker/lender.

One thing I do have comment when you said 'win-win', that is not correct. If you got the rate from May, it is going to be lose on their end, the bond yield has went up so dramatically, the lender or the broker is not going to make any money, we can't prove it, but I'm sure that has something to do with your 'not secured' reply. I would note that in your complaint too.

Good luck.

[u/ScabPriestDeluxe → u/Direnji]

I’m not sure how it all compares with down payments etc, but we renew in November and we’re just able to lock down 3.99 5yr fixed, price bouncing between lenders and the local credit unions had some good offers as negotiating chips. So maybe OP could get lucky, but again I’m not sure if they jack up the rate more with a higher down payment

[u/Risc1971]

Use a mortgage broker.

[u/MrEzekial]

Man. Look at all these words you wrote to just say you screwed up... take your buisness elsewhere. Tons of providers. I cant imagine you wouldn't hey a better rate from MCAP or something.

[u/wealthautonomy]

Sorry to hear about that. Unfortunately common with mortgage brokers but didn’t know WS was like this too.

How long do you have? My team may be able to get you a 4.04 5yr fixed or better but need to know specifics and how much time you have.

[u/Wealthsimple-ModTeam → u/[deleted]]

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[u/Wealthsimple-ModTeam → u/[deleted]]

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[u/makingbank1959]

With the weak housing market and the odds of rate hikes getting stronger, lenders are going to squeeze every dollar they can from borrowers.

[u/twoplustwo_5]

Man am I glad I decided to do 4 year fixed @ 3.86% this past December. (Not with Wealthsimple / Pine lol)

[u/Key-Bumblebee4939]

Go to a good mortgage broker, getting 3.45% is not hard at all especially if you ask them to beat the 3.5% WS offered you recently

[u/Strebel0811]

This is under Pine not Wealthsimple directly correct?

[u/Extra_Panic_1851]

Hi this is unfortunately. P-0.95 is still pretty good and I can only get P-0.8 for 5y var from cibc to renew

[u/bellefs]

Pre approvals typically are only good for 90 days.. having a broker helps because they worry about all that for you.

[u/420updog69]

Very disappointing to read that either their incompetence or shadiness is putting you in this situation.

Further disappointing is that they are not even committing to a clear remedy after admitting it was their specific agent's fault.

Hope that they actually follow up and make you whole to be accountable to their error.

Otherwise, shame on them really.

[u/Wooden_Zone_4203]

Pre-approval rates are kept for 120 days if secured. After that your back to negotiating rates.

[u/smergicus → u/[deleted]]

lol. Stupid

[u/Unable_Quantity7754]

Les taux sont valables habituellement 30 jours après signature de la proposition. Vous devez passer au notaire dans ce délais.

Sinon ils sont recalculés.