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.
Variable mortgage rates:
Variable mortgage rates are frequently more expensive than fixed mortgage rates. They may, however, change during the course of your loan. Market movements (through the prime rate) affect the amount you pay on a variable mortgage, which affects the amount you pay. As a result, your payment amount may fluctuate over time. Variable rates have grown more appealing as fixed rates climb in 2022, driving more potential buyers to opt for 5-year variable rate mortgages.
Variable rates are often less expensive than fixed rates, but they are also more erratic and potentially riskier. Variable mortgage rates, on the other hand, have a number of important advantages to consider:
- As long as you continue with your original mortgage provider, you can change your variable rate to a fixed rate at any time.
- Getting rid of a variable rate mortgage is far less expensive than getting rid of a fixed rate mortgage.
According to a research conducted by York University professor Moshe Milevsky in 2001, over 90% of Canadian borrowers who had a variable rate mortgage paid less interest throughout the life of their loan than those who had a fixed rate.
Closed and Open Terms
If you’re wondering whether an open or closed mortgage is better for you, the answer is that while open mortgages can be beneficial in some situations, the great majority of Canadians prefer closed mortgages. While open mortgages provide more flexibility, closed mortgages are by far the most popular option, not just because of lower rates, but also because most homeowners do not plan to pay off their mortgage anytime soon. Furthermore, no open fixed rate mortgages are available, and variable rate mortgages are uncommon. As a result, a home equity line of credit is the most frequent kind of open mortgage (HELOC). The differences between open and closed loans are shown in the table below.
Closed mortgages that have been paid off:
Rates on closed mortgages are lower than rates on open mortgages. Closed mortgages are available in fixed or variable terms, but the amount of principal you may repay each year is limited. You may be charged a prepayment penalty if you pay off the whole principle amount of a closed mortgage before the allotted term, which is normally 3 months interest on the outstanding balance.
OPEN Term MORTGAGES:
Open mortgages allow you to pay off the whole loan amount at any point during the duration of the loan. This sort of loan has the drawback of charging a premium in the form of higher interest rates. If you intend to relocate soon or if you expect a substantial sum of money in the form of an inheritance or bonus that will allow you to pay off more of your loan, you might want to explore an open mortgage.
What mortgage finance choices do I have?
While satisfying the requirements for the best rates is critical, you should also consider the fundamentals of qualifying for and acquiring a mortgage. Here are some of the factors that potential lenders consider when determining whether or not to lend to you.
