Mortgage Rates
* Some conditions may apply. Subject to change without notice. Rates may vary depending on amount borrowed, collateral offered or other factors. Contact your Mortgage Broker at Yves St-Denis Mortgage Brokers for more information.
Fluctuating mortgage rates
Fixed mortgage rates are often more expensive than variable mortgage rates. However, they may vary during the term of your loan. The amount you pay on a variable mortgage is affected by market changes (through the prime rate), which impacts the amount you pay. As a result, the amount of your payment may vary over time. As fixed rates rise in 2022, variable rates have become more tempting, causing more potential buyers to choose for 5-year variable rate mortgages.
Variable rates are usually less expensive than fixed rates, but they are more volatile and might be considered riskier. Variable mortgage rates, on the other hand, offer a few key benefits to consider:
- You can alter your variable rate to a fixed rate at any time as long as you stay with your original mortgage provider.
- It is significantly less expensive to get rid of a variable rate mortgage than it is to get rid of a fixed rate mortgage.
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According to a key study published in 2001 by York University professor Moshe Milevsky, over 90% of Canadian borrowers who had a variable rate mortgage throughout the length of their loan paid less interest than those who had a fixed rate.
Mortgages that are active or inactive
If you’re wondering whether an open or closed mortgage is better for you, the answer is that while an open mortgage can be advantageous in some cases, the vast majority of Canadians prefer a closed mortgage. While open mortgages offer greater flexibility, closed mortgages are by far the most popular choice, not just because of cheaper rates, but also because the majority of homeowners do not intend to pay off their mortgage anytime soon. In addition, there are no open fixed mortgages, and variable rate mortgages are unusual. As a result, the most common type of open mortgage is a home equity line of credit (HELOC). The following shows the differences between open and closed loans.
Mortgages that have been paid off:
Closed mortgage rates are lower than open mortgage rates. Fixed or variable closed mortgages are available, but the amount of principal you may repay each year is limited. If you pay off the whole principal amount of a closed mortgage before the allowed time, which is usually 3 months interest on the outstanding balance, you may be assessed a prepayment penalty.
Mortgages that are still open:
Open mortgages enable you to pay off the whole loan amount at any time throughout the loan’s term. The disadvantage of this type of loan is that it comes with a premium in the form of higher interest rates. You might wish to consider an open mortgage if you plan to relocate soon or if you expect a large quantity of money in the form of an inheritance or bonus that will allow you to pay off more of your loan.
What are my mortgage financing options?
While meeting the standards for the best rates is important, you should also think about the basics of qualifying for and receiving a mortgage. Here are some of the things that potential lenders look for when deciding whether or not to provide you with a loan.
