Mortgage brokers are always looking for the best rates for their clients. The difference in a few percentage points can equate to thousands of dollars down the line. A professional mortgage broker can always help you navigate through the house buying process and decide what’s the best financial option at hand.
A mortgage rate essentially refers to the interest rate you’ll be paying regularly in exchange for the loan. The Bank of Canada regulates financial lending across all institutions and regularly adjusts the key interest rate. Usually in economic downturns, the Bank of Canada increases the key interest rate to offset the threat of defaulting borrowers. The key interest rate currently rests at 1.75% and regularly fluctuates depending on a number of factors including economic productivity.
In addition, there are different types of mortgages available. The two main times are fixed and variable mortgages. The main different is that the latter may change depending on fluctuating interest rates. The term (or the duration) can also play a major factor in your regular payments.
The average Canadian does not have hundreds of thousands of dollars in the bank to purchase a home in cash. A mortgage presents an accessible method to purchase property and has been around for hundreds of years. During the 20th century, banks and other large financial institutions made mortgages available to middle class earners, creating a surge in home ownership rates across North America.
This answer depends on a number of factors including the asking price of the home you wish to buy, the current real estate market in your area, and much more. Most mortgages in Canada require a down payment equivalent to 20% of the total asking price. If you don’t have this sum of money, you’ll likely have to purchase mortgage insurance, which will increase your monthly payments. For more information, you can always use our mortgage payment calculator to get an estimation regarding your monthly payments.