Canada Mortgage

Mortgages Canada exists solely to provide the best financial services to its clients. This notion means that not only will we fight to get you the best mortgage rates, but we’re here
to provide you with important information and easy-to-use resources as well. Read on to find out more about Canadian Mortgage interest rates, home mortgages, second mortgages and how they intertwine. Moreover, to facilitate your search for a mortgage and a new home, and to better understand your financial situation, we strongly recommend you take a look at our comprehensive mortgage calculator resources.

Canada Mortgage: Interest Rates on First & Second Mortgages

If you’re thinking about obtaining a mortgage in Canada, the following is some information on interest rates and trends that may affect your decision:

Canada Mortgage: Interest Rate Overview

Changes in interest rates can directly impact how high your monthly mortgage payments are. Let’s take a look at some general information on the interest rates you can expect to receive on first and
second mortgages in Canada.
Note: Depending on what information you currently have, you can use one of our tools to determine what kind of interest rates would be desirable and compare them to what’s currently available. Try our mortgage variable isolator calculator and see how isolating different variables, including interest rates, monthly payments, payment frequency, and other factors, affect your mortgage costs.
It’s a helpful mortgage interest rate calculator, mortgage payment calculator, mortgage loan calculator and much more – all in one!

Canada Mortgage: Rates on First Mortgages

To get the best possible rate on a first mortgage, most mortgage experts advise that you put down at least 5%. This classifies your mortgage as a hi-ratio mortgage, which means that the lender is protected from default by either the Canada Mortgage Housing Corporation (CMHC), or a private, government-approved insurer.

So, assuming you can come to the table with at least a 5% downpayment, what kind of interest rate can you expect?

Canada Mortgage: Determining your First Mortgage Interest Rate

Canada Mortgage: Prime Rate. The best way to calculate this is to look up the prime rate. This changes frequently, so you want to check it as close to the time you are considering applying for a mortgage as possible. The best source of information for the current prime rate in Canada is the Bank of Canada. Click here to see the prime rate directly from the Bank of Canada website.

Canada Mortgage: Rates on Second Mortgages

A second Canada Mortgage is commonly referred to as a home equity loan. A second mortgage, if used strategically, is a sound financial tool to fall back on. For example, if you want to go back to school to finish a degree to further your career, a second mortgage can pay for it. As a second mortgage in Canada is based on the equity in your home, it doesn’t have to interfere with a first mortgage. Second mortgages are usually paid back before first mortgages, as they are taken out for a shorter period of time.

As second mortgages pose a higher risk for lenders, expect to pay a higher interest rate than the one you got on your first mortgage.

Second mortgage interest rates depend on a number of factors including:

• Amount of equity in the home
• Your credit rating
• Length of loan, etc

Generally, second mortgage interest rates are between 10% and 20%, with about 12% being the norm.

One more thing you should know about a second Canada Mortgage: Most lenders will only lend only up to 80% of the equity in the home. While some may lend up to 100%, it’s rare. Example: If you have $100,000 in equity, a lender will loan you up to $80,000, if you qualify. This is to guard against the fluctuations in the real estate market, which is an ever-changing entity.

The Next Step

After taking a look at your financial status using our mortgage interest rates calculator, or our mortgage payment calculator, you can take the next step and apply for your mortgage today. Of course, you can always contact us for more information and clarifications. Our experienced mortgage specialists are always available and ready to analyze your own personal situation.

Canada Mortgage Interest Rate Note: Remember, these are just basic rules of thumb. Consulting a qualified mortgage professional is the best way to get specific advice about your individual financial situation.