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Mortgage Rates
The most talked about component of a mortgage is
the interest rate. Why? Because it's the easiest part of
the mortgage's conditions to visually relate to and is
the most advertised mortgage component by lenders
and brokers.
Yes interest rates determine your payment amount
and money does talk but often the lowest rate isn't
the best rate for your circumstances. Why? Because
your mortgage will have other conditions that are very
important too and they can significantly affect your
bottom line.
It's important to be aware of all the terms of your
mortgage contract and how they will come into play if
you decide you want to make pre-payments,
refinance or switch lenders at renewal.
What’s My Best Mortgage Rate?
As mortgage brokers we get asked this a lot and well
to be frank this isn’t a simple x.xx% answer. We don’t
like guessing and we require more information to
provide you with accurate information.
How Your Mortgage Rate is Determined
A
lender
will
determine your mortgage interest rate by a number
of aspects which may include the following:
• Your credit score & payment history
• Your income type
• The property type
• The equity in your property
• If the mortgage is insured or insurable
Qualifying Mortgage Rate vs Contract
Mortgage Rate
In order to qualify for a mortgage term of less than
five years for a standard mortgage there will be two
interest rates to consider, the qualifying rate and the
contract rate. The qualifying mortgage rate is set by
the Bank of Canada for insured mortgages and is
referred to as the Benchmark Rate.
The Benchmark Rate is based on posted five year
fixed rates. The Government initiated this method to
insure that if there are any increases in mortgage
rates in the short term that the borrower would be
able to afford their mortgage payments at renewal.
Sample Current Mortgage Rates