It is crucially important to secure a favorable APR on your mortgage loan, as you will be feeling the weight of the number crunch for a very long time. However, with the wide variety of offers available in the Canadian market, it isn’t easy to keep track with all the latest mortgage products and the quality of the attached financial conditions. Doing some research is necessary before you can feel confident about your new mortgage agreement.
This article represents a shortcut for Canadian mortgage rate comparison and will tell you all you need to know about interest rates in this country.
What is considered a good rate?
The answer to this question depends on the exact type of the loan, as well as its size. In general, multi-year loans come with APR’s that range from 2-4%, with approximately 0.2 to 0.5% large gap between providers on similar types of loans. To be considered favourable, your rate should be in the lower part of this range, especially since APR”s in Canada have been on a slight decline recently. With more than two dozen providers to choose from, you should be able to find a mortgage that meets this criterion without having to look too hard.
Mortgage length matters
Comparing APR’s on mortgages of different length is a classic case of apples vs. oranges, as lenders have separate tariffs for various mortgage products. Very short mortgages (less than 3 years) and very long agreements (more than 10-15 years) tend to be expensive, with APR’s well over 3%, while periods between 5 and 10 years tend to be the sweet spot where the rates are at their lowest. It’s really a delicate dance to find the most appropriate length and balance the best possible rates with other advantages associated with longer mortgages.
How to get the best rate?
Not everyone is eligible for best mortgage products, as lenders typically extend the best conditions to customers with good financial standing and spotless credit histories. To qualify for loans with the lowest APR’s, you need to demonstrate the ability to meet your obligations in a timely manner. One way of improving your position regarding the rates is to offer a larger down payment than required by law since lenders may be willing to give you a better deal if they have to finance a smaller portion of the purchase. It goes without saying that you should talk to a couple of banks before accepting any offers.