If you're shopping for a mortgage in Canada, you're likely searching for the best possible rates. After all, a lower mortgage rate can save you thousands of dollars over the life of your loan. But with mortgage rates constantly changing, how can you find the lowest rates and ensure you're getting the best deal?
This guide provides an up-to-date snapshot of Canada’s best mortgage rates, along with helpful tips for qualifying for the lowest rates available.
Why Mortgage Rates Matter
When you're buying a home, the interest rate on your mortgage plays a huge role in how much you’ll pay over time. A lower rate means lower monthly payments, which can free up your budget for other needs. And, if you’re borrowing a large sum, the savings can be significant over the long term.
How to Find the Best Mortgage Rates in Canada
The Canadian mortgage market is always evolving, with rates changing frequently. To help you navigate this shifting landscape, we’ve compiled a list of the best national mortgage rates available today. We also update this information daily, so bookmark this page to stay on top of the latest mortgage rate trends.
But simply finding the lowest rate isn’t always enough. There are a few other factors that will help you lock in the best possible deal.
How to Qualify for the Lowest Mortgage Rates
To get the best mortgage rate, it’s important to understand the requirements that come with qualifying for these low rates.
Insurance: Most of the lowest rates require mortgage insurance. This may seem counterintuitive—after all, why would putting less money down lead to a lower rate? The answer is simple: mortgage insurance acts as a safety net for lenders, which makes them more willing to offer cheaper financing. Typically, mortgages with less than a 20% down payment require insurance by law.
Tip: If you switch lenders at the end of your mortgage term and don't increase your loan or amortization, ensure the new lender keeps your insurance active. This can help you maintain lower rates in the future.
Insurable Mortgages: If you can put down at least 20% of the home’s value, you may qualify for an "insurable" mortgage. These loans often come with lower rates—sometimes 10-25 basis points (bps) lower than uninsured loans. For example, a 10 bps savings could save you over $470 over five years on every $100,000 you borrow.
Key Factors for Qualifying for the Best Rates
Beyond mortgage insurance, there are a few key qualifications that lenders look for when offering the best prime rates:
Credit Score: A good credit score (usually 720 or higher) is essential to getting the lowest rates. While some lenders may accept lower scores, this is a general benchmark.
No Recent Missed Payments: Lenders will look at your credit history to ensure there are no recent missed payments or derogatory marks.
Income: Lenders want to know that you can afford your mortgage. This means having a stable income (such as a job letter and pay stub) or tax documentation if you're self-employed.
Debt-to-Income Ratio: Your monthly housing costs (including mortgage payments, property taxes, and heating costs) should be no more than 39% of your gross income. All monthly debt payments (including loans and credit cards) should be under 44% of your gross income.
Marketable Property: The property you’re buying needs to be easily sellable if needed. Some lenders may not offer the best rates for rural or unique properties that are harder to resell.
Additional Tips for Saving on Your Mortgage
Switching Lenders: If your mortgage term is coming to an end, consider switching lenders. Many lenders offer competitive rates for new customers, which can be a great way to save. Be sure to review the terms carefully and confirm you’re not paying higher fees in other areas.
Rate Holds: Some of the best rates require you to close your mortgage within a specific time frame (often within 30 days). Make sure to check with your lender on their rate-hold policies.
Amortization Period: Lenders tend to offer better rates for shorter amortization periods. If you can afford higher monthly payments, choosing a shorter amortization period can reduce the total cost of your mortgage over time.
The Bottom Line
Finding the best mortgage rate in Canada isn’t just about getting the lowest advertised rate. To truly maximize your savings, it’s important to consider factors like insurance, your credit score, income, and the type of property you’re buying. By keeping these factors in mind and negotiating with lenders, you can secure the lowest possible rate and save money in the long term.
