Mortgage Rates in Canada

Shopping for mortgage rates in Canada can be daunting. There are posted rates, discounted rates, variable or floating mortgage rates, fixed interest rates, open, closed, short and long term. What do all the terms mean and which one is right for you?

Lets start with what you will hear as bank mortgage rates or posted rates. These are the mortgage rates in Canada that banks advertise and usually use a starting point when dealing with clients; the more profitable you are to the bank, the larger the discount off of the posted rate. When a posted rate is fully discounted it is often referred to as the banks wholesale rate; these are the mortgage rates offered by our mortgage brokers.

Floating or variable rate mortgages are those that fluctuate with the prime lending rate. Your rate will either be a discount or surcharge on the prime rate, depending on market conditions at the time you take the mortgage out. Lines of credit are products that fluctuate with the prime, and are generally 'open' which means they can be paid out at any time without incurring a penalty; they usually only require an interest only repayment. Variable rate mortgages are similar products except they usually require a principal portion to be repaid and can be either open or closed (requires a penalty to payoff).

Long and short term mortgage rates in Canada really come down to preference or future plans. If you plan to sell the home in 3 years and not buy again you likely don't want to lock in for more than a 3 year term. If you plan to buy again, your mortgage is likely portable, meaning you can take it with you to your new home. Planning ahead to avoid penalties can save you significant money as interest rate differentials can be significant if interest rates go up during the term of the mortgage. If you are unsure of whether short or long term is the way to go, we have products that allow you to take both in the same mortgage product (HELOC).

There is a lot of information to understand when looking for a mortgage, most people quite honestly aren't interested in learning about it. That is where a mortgage broker comes in to find the right product for your situation and explain only the parts that you need or care to know. Just as a financial advisor handles your investments, we handle your credit facilities. So leave the financing to us and we will find you the best mortgage rates in Canada!