Buying a home is a big step. Getting the right type of mortgage at the best possible rate can save you thousands of dollars and make homeownership much more affordable.
To help you find the best mortgage rates in Canada, Insurdinary has compiled a list of the top mortgage options below. Plus, a free mortgage rate calculator to help you run the numbers!
Motusbank is one of the newest lenders on the scene. They offer banking, investment, and mortgage services. Their mortgage options range from 2.49% to 6.00% with open or closed, and fixed or variable options.
If you’re refinancing a mortgage with at least 20% equity or purchasing a new home with 20% or more down, Manulife has unique mortgage options for you. Manulife One combines your mortgage and other debts into a single account, connected to your savings and checking. Your earnings are applied to your debts, reducing the balance and minimizing your interest expenses.
The money is still available for your use, similar to a revolving line of credit. Any money sitting in your account will effectively earn you back your mortgage interest, which is likely quite a bit higher than the interest rate on a typical savings account.
Meridian offers a wide range of mortgages and rates to fit your needs. Application is simple and can be completed online, in a bank branch, or over the phone. You can even set an appointment for a mortgage specialist to come to you.
Like Motusbank, Meridian also offers 20/20 prepayment options and a yearly “Skip a Payment”. You can create a custom payment schedule based on your budget, and even safeguard your home with Group Mortgage Protection.
Whether you’re buying your first home, renewing, or refinancing, Bank of Montreal can help!
BMO offers a wide range of mortgage options and flexible repayment plans. Their website is chocked full of helpful information on how to choose a mortgage, how to set a payment plan, and how to determine how big of a home you can really afford.
Plus, if you find yourself in a financial bind, they even have solutions to help you stay current on your payments.
Finding the best mortgage for your home can make a big difference. Interest rates and repayment policies can greatly impact the total cost of your home and its monthly impact on your finances. Such an important decision should be made with care.
Unfortunately, comparing mortgage information from several lenders online can take hours and be very complicated. Every lender highlights different information on their website. If only all of this info was in one place!
With Insurdinary, it is. We’ve created this page as a resource to help you find the mortgage that best fits your needs. Compare multiple lenders at once to select the ideal option for you. Plus, you’ll save money by choosing a lender with the lowest interest rates available.
When searching and comparing mortgages, it’s important to know the types of mortgages available and what the differences are.
They can vary in speed of repayment, interest rate, and whether that interest rate changes or remains the same over time. When you understand the features of each type of mortgage, you’ll know you’re comparing equivalent options.
Here are the different types of mortgages to consider:
The interest rate is set, so you’ll have predictable monthly payments.
The interest rate fluctuates and is based on the type of loan you get.
Typically short-term, low payments, and often interest-only.
You only pay interest for a set period of time.
For seniors only. Gives you access to your home equity’s line fo credit.
Lending option that includes loans supported by government entities to help more people buy homes.
80/20 combination home that helps you avoid taking out insurance on the full amount.
Otherwise known as a “home equity loan”. Typically has a high interest rate.
Many home buyers have unanswered questions when it comes to getting a mortgage. This can be a costly mistake if it leads to choosing the wrong option.
Our FAQ section below will help you better understand your options and decide on the mortgage that best fits your needs.
Fixed-rate mortgages have a set interest rate for the life of the loan. Regardless of economic fluctuation, you pay the same interest rate. A variable-rate typically remains the same for an initial term, then resets based on the current market rates. This means your variable rate could go up or down, affecting the size of your payment or how much of the payment is applied to the principal.
Some lenders offer a protected variable rate. After the initial term, the interest rate changes according to the market but it cannot exceed a predetermined cap rate. There may also be a predetermined minimum rate, in the event that market rates drop.
Fixed-rates are often slightly higher than variable rates. This is because interest rates are assumed to increase over time, so the variable rate will likely increase when it resets. The lenders estimate in an effort to balance the two.
Not to be confused with the “amortization period” (which is the entire time it takes to repay the mortgage), the “term” is the initial period before rates and other agreed-upon elements of the mortgage can change. This can be anywhere from 6 months to 5 or more years. After the term ends, interest rate and payment arrangements may be renegotiated if you find something more in your favor.
In an open mortgage, you are free to pay off the mortgage at any time, with no penalties. You can also renegotiate the mortgage at any time. A closed mortgage has a set amortization period and paying early will result in prepayment penalties.
You can save substantial amounts of interest by paying an open mortgage off early but they typically come with higher interest rates. If you plan to pay your mortgage more quickly than the required, make sure the interest saved by prepayment makes up for the higher interest rate.
Although some lenders and programs can work with much smaller amounts, the typical down payment is 20% of the price of the home. If you’re able to get a mortgage with less than 20% down, you’ll be required to purchase CMHC mortgage insurance, which protects the lender if you default on the loan. Make sure you consider this cost when you compare rates.
In addition to the down payment, remember to plan for closing costs. Closing costs include legal fees, land transfer fees, property taxes, and other costs that must be paid as part of the closing process on your home purchase. These can add up to 3-4% of the sale price of the home.
Like we mentioned in the previous question about down payments, mortgage default insurance is required when paying less than 20% down on a mortgage loan. This is required by law, and not under the control of the individual lender.
Mortgage default insurance protects the lender in the event of a default by paying the remaining debt. It reduces the risk to lenders, allowing them to offer home mortgages to more people at a lower interest rate than would be possible if the risks were higher.
The cost of mortgage default insurance is between 2.80 and 4.00% of the price of the home. However, unlike most closing costs, mortgage default insurance is built into the mortgage and financed over the life of the loan. It increases the total cost of the home and the size of the monthly payments but does not require a lump sum of cash at closing time.
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