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Best Mortgage Rates in Canada

Best Rates

TermTypeRate
1 YearFixed Closed6.59%
2 YearFixed Closed5.94%
3 YearFixed Closed4.99%
4 YearFixed Closed5.14%
5 YearFixed Closed4.94%
Secured Line of CreditOpenPrime + .50%
5 Year (Prime 7.20% less 1.10%) VariableClosed6.10%

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A great mortgage solution not only fulfills all your current budget requirements but makes sure that you are not burdened during the term with any limitations regarding lump sum payments, payment increase options, or portability. We will not only provide you with the lowest rate in the market, but we strive to ensure maximum flexibility within the product. We will secure the best rate for your individual situation as no one has the same numbers. Below is a table of a sample of rates that we can secure for you.
TermTypeRate
1 YearFixed Closed6.59%
2 YearFixed Closed5.94%
3 YearFixed Closed4.99%
4 YearFixed Closed5.14%
5 YearFixed Closed4.94%
Secured Line of CreditOpenPrime + .50%
5 Year (Prime 7.20% less 1.10%) VariableClosed6.10%
To buy your home, you might have to take a mortgage which binds you and the lender for a specific period with the house as collateral. Mortgage terms can vary from six months to ten years or more.
The most common mortgage term in Canada is five years, so many search for the best five year fixed mortgage rates or for the best five year variable mortgage rates. But sometimes the search will be for the best 3 year fixed mortgage rates in Ontario or best 3 year variable mortgage rates in Ontario. Why? It depends on many factors, the most popular factors being the economy and inflation. If for example the inflation is high, the bank of Canada may raise rates to control inflation therefore mortgage rates will rise. In this case, a lot of people may not search for the best five year fixed mortgage rates in Ontario or best five year variable mortgage rates in Ontario. The reason is they may want to lock into a shorter term in hopes that mortgage rates will lower by the time their mortgage term ends so they can switch their mortgage balance to lower rates with another bank/lender.
To choose the best option for your individual situation meeting all your needs, it is a good idea to go through a mortgage professional who can save you time in searching with many banks at the same time by only pulling your credit once. Every time you walk into the bank yourself, your credit will be pulled. Each pull will lower your score and each pull will have a detailed account such as date, lender, etc. If there’s too many credit pulls, not only can your score become too low for approval but it will raise red flags and have banks asking what happened with each  bank which can result in being turned down. This can be avoided through a mortgage agent who is licensed by the gov’t to broker your mortgage with many banks/lenders at the same time on your behalf by pulling your credit only once.

Is the Lowest Rate the Best Rate?

A lot of people determine the interest rate on mortgages by the lowest mortgage rate, but this does not necessarily determine the best mortgage rate. Some low mortgages might end up costing more in the end and quite often having terms that are not flexible. To find the best mortgage with rates & terms, it’s best to discuss this with an experienced mortgage agent to explain how this can happen.

Also when choosing the best mortgage rate, consider the interest rate and the annual percentage rate (APR), which reflect the interest rate, closing rate, and other fees that might be involved in getting the loan depending on the bank/lender. You also need to consider the type of mortgage plan, the mortgage term, prepayment penalties, etc.

Tips for Getting the Best Mortgage Rate

Compare Mortgage Rates

Before choosing a mortgage plan, you need to compare a couple of mortgages and see which offers the best rate for your circumstances. Consider which category the rate belongs to such as Insured, Insurable, Uninsured and then the Loan to Value the rate is offered at. For example if it is over 80% LTV (loan to value) or between 75-80% or up to 65%, etc as this will also determine the interest rate. This matrix of rates exists in all banks across Canada that offers the lowest rates. Uninsured mortgage rates are higher. Also consider primarily the annual percentage rate and not the interest rate.

Increase Credit Score

A credit score is a number between 300-850 that shows how likely you are to pay a loan on time. It determines how creditworthy a person is based on the credit report. The higher your credit score, the more likely you will get a reasonable rate. You can get the lowest interest rate if you have a credit score of 680+. Some banks will offer similar rates though through a mortgage agent with lower scores, contact us today to find out what your options are.

Reduce Debt Service Ratio

The debt service ratio is the percentage of a person’s gross annual income needed to pay off all their outstanding debt. Mortgage banks and lenders use this to determine the risk level of a loan. A low debt service ratio will mean the risk level is low, increasing the chances of getting a reasonable rate. Canada mortgage and housing corporation recommend keeping your gross debt service below 39% and your total debt service below 44%. Consult a mortgage agent to determine your debt servicing ratios as approvals can be done even while the borrower carries debt.

Increase Down Payment

If your down payment for the house is less than 20%, you will need to pay mortgage insurance because of the increased risk the lender has to bear in case the borrower defaults on their mortgage payment. You can either pay this insurance premium in one lump sum or have it amortized into your mortgage for a low monthly payment. Since there is insurance for the bank, the interest rates offered in this category, Insured, is one of the lowest rates offered.

Employ the Service of a Good Mortgage Broker

Going through the stress of finding the best mortgage deal might be too much for you. We offer the best brokerage services. The goal is to match your individual circumstances with the best mortgage rate and terms of the mortgage, as well, that is the law. It is unlawful to place borrowers in mortgages that would do them harm. It is also unlawful to place borrowers in mortgages that are worse than what their circumstances could’ve allowed them to be approved for. For example placing borrowers with banks/lenders with higher rates with fees when they could’ve placed them with banks/lenders with the best rates/terms of the mortgage with no fees. However, if there are shortfalls for approval with the banks with the best rates and no fees, the Alternative mortgage with higher interest rates/fees are quite often used as temporary until they can fix the shortfalls then later switch the mortgage once this is done most often with no cost to the borrower to switch. Examples of when alternative mortgages are used- bad credit, not enough income to service the mortgage and all other debt, etc.

Why You Should Choose Us

Finding the best mortgage rate may seem easy, but it might become difficult if you don’t have sufficient information. Using a mortgage broker will help you save time and energy. You don’t have to go through the stress alone of searching for the right mortgage. We help you find the perfect mortgage to fit your plan and budget.

Also, the mortgage agent can find a broader range of products and the best deals while only pulling your credit once without greatly affecting your credit score as every pull lowers your score. An added benefit is the financial advice offered by brokers. Employing us could save you the loss of making unwise financial decisions in the short and long term when choosing a mortgage.

Conclusion

A mortgage rate is the rate of interest placed on a mortgage. Choosing the best rate is essential in the long term as it can save you thousands of dollars. Contact us if you want to employ the service of a mortgage broker to ease your job.

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Karen Parrot
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