THE MOST affordable mortgage rates in Canada
In the last few months the financial world has seen a number of highs and lows. Those who understand the game of oil prices will agree that the three letter word, “oil” has the power to regulate every other thing under the sun. Consider it a blessing in disguise if you are the lucky one who does not have to make (the necessary or unnecessary) connections between oil prices, mortgage rates and everything else in between.
But as they say ignorance is not always bliss, and in today’s world this holds true. In simple terms, mortgage is a loan given against one’s property or home that one purchases. The lender (usually a bank) pays on behalf of you for your house and in return asks for repayment in divisions over a fixed period of time. The division of money to pay back is determined based on the principal amount, down payment, mortgage and interest rates. In case one fails to make these divisional payments on time, the house or property becomes the asset of the bank or lender. Qualifying for a mortgage is also not a cake walk as it was in back in the 2000s. With credit defaulters on the rise and the 28/36 debt to income ratio, it has become tough for lenders to provide, and property aspirants to buy their dream houses. The Bank of Canada’s mercurial drop in the prime rate from 3% to 2.85 % in January 2015 sent shock waves deeper than the oil fields. Mortgage experts had predicted then that Canada would soon find its mortgage market hitting record lows, which came true soon enough. Competition in the market led the Royal Bank of Canada to follow suit making it the first among top banks in Canada to provide mortgage rates at 2.84% for a five year fixed-rate and 3.84% for a 10 year fixed-rate.
TD Canada Trust offers the lowest posted specials on fixed term closed rates for both 2 year and 5 year mortgages currently in market. Catching up on the rate war, TD Canada Trust went a point further dropping their mortgage rates to 2.74 % for the 5 year fixedrate in a special offer scheme. TD Canada’s Marc Kulak, AVP, Real Estate Secured Lending says, “We review our rates on an on-going basis to ensure we remain competitive and provide our customers with flexible mortgage options and the right rate to meet their individual needs.”
Feeling the pressure, in a matter of weeks the Canadian Imperial Bank of Commerce came up with an “intro-rate” of 1.99% for first 9 months of investment under their New Residents and Non Residents Home Ownership program, along with an on-going 2.83% for a 4 year fixed-rate. CIBC chose to slash its rates to 2.69 % on the 4 year fixed-rate plan under normal schemes rather than in the 5 year model. The rate war doesn’t end at banks, it is further intensified by other private lenders in the market: Butler Mortgage offers a rate of 1.99%, Canwise Financial offers a rate of 2.48%, Mortgage Alliance Company of Canada and Redpath Financial offer a rate of 2.49% as well there are various other private lenders in the market. The complexity of choice is further diversified when real estate agents also provide mortgage services. For new buyers it is advisable to take help from a trusted mortgage financial institution, leverage on their knowledge of the market and knack for providing good deals. Marc Kulak suggests, for new property investors a competitive mortgage interest rate is important, but so is having flexible mortgage features. He also advises prospective buyera to visit a local branch or contact a Mortgage Specialist to better understand home financing options available to them.
Aa a consumer it is in your best interest to consult several agencies and institutions and not just bank upon one to ensure that you don’t end up with completely unreasonable brokerage fees. Good luck with your search for the best mortgage rates (which may seem harder than finding the right soul mate) and remember to pay on time, every time.