Mortgage interest rates in Canada are known to vary for many different reasons. These include the policy interest rate of the Bank of Canada, the type of mortgage that a customer opts for, such as a variable rate mortgage or a fixed rate mortgage, and economic conditions.
The Bank of Canada influences prime lending rates, and this, in turn, has an impact on variable mortgage rates. Inflation and economic growth are also important factors that influence mortgage rates in Canada. If you are looking to obtain the best mortgage rates in Canada, you should reach out to a mortgage broker to help you do this.
How Rates Impact Your Loan Repayment
- Mortgage rates are known to directly impact the amount of money that you repay towards your home loan every month.
- If the mortgage rates Kitchener are high, then it means that the money that you repay for your home loan every month is a lot.
- On the other hand, if the interest rates are low, you pay less money towards your mortgage every month.
- As a mortgage customer in Canada, it thus becomes important to take advantage of the lowest interest rates at the time of applying for a mortgage, and also when renewing your refinancing your mortgage.
- Obtaining a home loan for the lowest interest rates can reduce the burden of repayment for you, making you free from the stress and anxiety that you would otherwise experience.
- Mortgage interest rates are known to vary. It is a mortgage broker who has the insights or knowledge to inform you when the ongoing interest rates are low, and guide you towards applying for a mortgage at a time when you can take advantage of low interest rates.
With the advice and guidance of a mortgage broker, you can obtain a home loan whose interest rates are on the lower side, and repaying the loan will not be a financially burdensome experience for you.
Fixed Rate Mortgages and Variable Rate Mortgages
Mortgages in Canada are known to be of two types, namely, fixed-rate mortgages and variable-rate mortgages.
- Fixed Rate Mortgage – In a fixed rate mortgage, the interest rate on your home loan does not undergo any change when adjustments are made to the prime lending rate by the Bank of Canada. This means that the amount of money that you repay towards your loan every month remains static.
- Variable Rate Mortgage – In a variable rate mortgage, the interest rate on your home loan can increase or decrease based on changes or adjustments that are made to the prime lending rate by the Bank of Canada. This means that your monthly repayment amount can increase or decrease based on whether rates are reduced or increased by the Bank of Canada.
A mortgage broker can review the state of your finances and let you know whether a fixed-rate mortgage or a variable-rate mortgage is more suitable for you to apply for, based on your financial situation.
Why Do Mortgage Interest Rates Vary?
Mortgage interest rates are known to vary for the following reasons –
- The financial situation of the loan customer.
- The economic conditions prevailing in the country.
- The type of home loan that is being applied for.
- Market forces like monetary policy, inflation
- Down payment made for the property.
How Mortgage Brokers can Get you Access to the Best Interest Rates
With the help of a mortgage broker, you can access the best mortgage rates Kitchener.
- Connects you with Lenders who offer the Lowest Interest Rates: A mortgage broker is connected to private lenders, alternative lenders, and credit unions who can provide you with a home loan at the lowest possible interest rates. The interest rates that they offer are certain to be far lower than the interest rates that are charged by banks in Canada.
- Can Inform you When to Apply for a Home Loan to Leverage Low Interest Rates: Mortgage brokers possess excellent insights and updates regarding the mortgage market, and can let you know of when to apply for a mortgage, so that you can leverage low interest rates upon doing so.
- Helps you to Access the Best Rates for First Time Home Buying as well as Renewal and Refinancing: With the help of a broker, you can not only benefit from low interest rates when buying a home for the first time in Canada, but you can also do this when renewing your mortgage or refinancing your mortgage. Mortgage renewal is something that you need to undertake at the end of a loan term. Renewal gives you the scope to negotiate new interest rates and new terms for your home loan. Refinancing is a process in which you obtain a second loan to pay off the outstanding balance for your first loan, while also using this money to clear other payments like credit card bills. Refinancing, too, can be done at the best interest rates when you have the best mortgage specialist Kitchener to help you with this process.
Qualities to Look for When Choosing a Mortgage Broker
When choosing a mortgage broker to help you access the best interest rates in Canada, you should select one who has the following attributes –
- The broker must be a licensed professional
- He should have good reviews of his services mentioned by clients on his professional website.
- He should have extensive knowledge about the mortgage market and should have been working in the mortgage industry for at least five to six years.
Thus, using a mortgage broker Kitchener can certainly be a good way for you to obtain home loans at the lowest interest rates in Canada. A broker can help you access interest rates that make it easy for you to repay your home loan by reviewing your finances and connecting you with lenders who offer home loans at interest rates that are much lower than what is charged by banks.
The help and guidance provided by a broker can enable you to understand why interest rates vary for home loans and the type of home loan you should apply for, such as a variable rate or fixed rate mortgage, based on your financial needs and abilities.
