Canada Mortgage Rate shoppers: Interesting facts you need to know

A Canadian mortgage rate is an ever-changing entity. What follows is some information to keep in mind as you shop around.

Canada Mortgage Rate: Getting the best deal

Everyone wants to get the best deal on their mortgage. However, this depends on many factors. There is no “one size fits all.”

• Canada Mortgage Rate and lifestyle goals
  
  As in, will this be your first home, or do you plan to upgrade in a few years? Is your career relatively stable, or do you plan to go back to school in the near future? Is your family set for the next 10 years, or do you plan on having more children, or see one off to college next year?
• Canada Mortgage Rate and financial goals
  
  Are you planning to retire soon? Do you have college tuition to contend with in the near future? Is there an existing illness that must be dealt with? Why are these questions important? Because they will determine whether you choose an open mortgage or a closed mortgage, a fixed-rate loan or a variable-rate loan, the terms of the loan, how much of a downpayment you can afford, etc.

All of these factors need to be taken into consideration to get the “best deal.” The best way to get a good deal on rates is to shop around for low Canada Mortgage Rates. Comparison shopping the in the Canadian mortgage rate market can really pay off. If you’re lucky, you can sometimes get a full percentage point off, or more! Time well invested when you consider that this can equate to a few hundred dollars a month, depending on your mortgage amount.

Canada Mortgage Rate: Why it’s lower here compared to the U.S.

In Canada, Mortgage Interest Rate calculations are defined by government legislation. It states that interest can only be compounded semi-annually. In essence, this caps compounding mortgage interest in Canada. In the United States, by comparison, there is no legislation that controls the compounding of mortgage interest. Hence, Canadian homeowners generally have lower monthly mortgage payments than their U.S. counterparts.

Canada Mortgage Rate: Calculator reminder

Because of the above, be sure to use a
Canadian mortgage calculator when trying to gather information about a Canadian mortgage.

Canada Mortgage Rate: Historical perspective

According to the Canada Mortgage and Housing Corporation (CMHC), the average five-year Canadian mortgage rate has ranged from a low of 5.46% (1951) to a high of 18.15% thirty years later in 1981. Click here for a more detailed look into historical mortgage interest rate fluctuations.

Canada Mortgage Rate: Predicting the future

If you want to keep your finger on the pulse of Canadian mortgage rates, experts generally agree that you should monitor the interest rates on bonds issued by the Bank of Canada. Why?

Because the bond market tends to be a good indicator of what the Canadian economy is doing. Traditionally, it acts as a kind of interest rate predictor.