Compare some of the best mortgage rates in Ottawa and Ontario from a large range of Canadian lenders. Contact me today to get expert guidance and to see if I can negotiate you a lower mortgage rate.
Although most lenders post their rates publicly, sometimes you may not get the lowest mortgage rate you have seen advertised. This is due to some rates only being offered for certain situations. Different rates are offered for those who are buying and those who are refinancing, for example. Also different rates are offered for those who are buying an owner occupied property or buying a rental property.
Learn more: First Time Home Buyer Ottawa
Learn more: Buying Your First Rental Property
The size of your down payment and where the property is can I also have an effect on the interest-rate.
Learn more: Down Payment On a House Ottawa
I am able to scan through dozens of lenders and different rates at each lender to show you the best deals that you may not be able to find or access otherwise. I can help cater the best mortgage for you and your unique financial situation. My goal is to ensure that you are always getting a fair deal and some of the best mortgage rates in Ottawa Ontario.
Having more options is crucial in assuring the mortgage is the right fit for you and you get a good rate.
A mortgage interest rate, is a rate that is charged on the principal amount of the mortgage. The principle of the mortgage is the amount that you are borrowing. They’re quite a few factors that go into determining a mortgage rate. In general, fixed rates are affected by the bond market and variable interest rates are affected by the Bank of Canada overnight rate.
The Bank of Canada overnight rate is reviewed multiple times throughout the year and can go up or down during these reviews. Typically when this rate moves it moves by .25%. This will affect those with a variable interest rate.
A lender will add a premium to the Bank of Canada overnight rate and usually this is about 2%. This amount can vary from lender to lender. Knowing which lenders add a larger premium to the Bank of Canada overnight rate is important. This is because if two lenders are offering you prime minus 0.5%, the lender with a larger prime rate will have a larger rate overall. Even though the discount looks the same.
Learn more: Bank of Canada
With a variable interest rate either your payment or your amortization may change during the term. This is due to your interest rate possibly changing during the term. As noted above, this will happen when the Bank of Canada overnight rate changes. For lenders that change the payment, if interest rates go up, your rate and payment will go up during the term. For lenders that change the amortization, if interest rates go up, your amortization can grow substantially with just small changes in the interest rate.
With that, in a rising rate environment you may come up for renewal expecting to have 20 years left after your first five years and learn that you now have 35 years left, for example.
It’s generally recommended to increase your mortgage payment if interest rates increase, in order to stay on the same amortization schedule.
For lenders that change the payment, your payment can go up or down depending on changes in interest rates. Those who are looking to budget and have a set payment during the term, may not like this option. This can make it hard to budget and control your month-to-month expenses and cash flow.
With a fixed rate mortgage this means that you are securing a fixed rate for a set period of time known as a term. This typically ranges from six months after 10 years. The most popular option is typically a 5 year fixed rate mortgage.
Learn more: Fixed Rate Mortgage
Learn more: 5 Year Fixed Rate Mortgage
When you lock in an interest rate for a set period of time, if interest rates go down, you would have to break your current mortgage term in order to lock into a lower interest rate. Depending on how much interest rates have decreased, it may be worth paying the penalty and acquiring a lower interest rate if there are savings overall and it is the right fit for you.
If interest rates go up however you will be quite happy that you have secured the rate.
However at renewal, as a caution your current mortgage terms will expire and you will be subject to whatever rates are at that time.
In order to protect people against a rising rate environment and to be sure that they can still afford their mortgage, a benchmark qualifying rate is used. This is also called the stress test.
Learn more: Mortgage Renewal
People generally like to lock in a rate when interest rates are low. This will protect them against interest rate increases that may take place. When interest rates are on a declining trend however some may want a variable interest rate in order to see if their rate will drop more during the term. With a variable interest rate you can lock into a fixed rate at any time without a penalty with most lenders.
Therefore if interest rates decrease during the term you could potentially get a lower rate than what you started with.
The right mortgage for you may be a different mortgage than the one that is the right one for your parents, colleagues or friends. It’s important to be sure that your unique financial situation is reviewed and a mortgage product is chosen specifically for you. When working with mortgage brokers in Ottawa Ontario, as they have so many lenders to choose from, it’s important to have them work closely with you in order to align the best mortgage for your needs.
Learn more: Mortgage Brokers in Ottawa
An Ottawa mortgage broker can review your income, closing date, the type of property you are looking to buy, your current assets and liabilities and so on to help determine the right mortgage for you. They also will help you determine your maximum purchase price and ideal down payment in addition to finding you the best mortgage rates in Ottawa Ontario.
Furthermore, they can help with budgeting to assure that the mortgage payment will work with your budget.
When looking for a mortgage, some customers unfortunately get overly focussed on an interest rate. However it’s good to look at the mortgage options as well. Some mortgages with lower interest rates are more restrictive or have higher penalties than other mortgages.
Having bad credit typically arises when you have not paid your debt obligations on time. For example you have missed payments or have failed to pay the minimum payments on your credit card for example. Also possibly you have missed a vehicle payment or even an internet or cell phone bill. Some people do not know that internet and cell phone bills now show on your credit bureau. Paying them on time is just as important as paying a credit card or mortgage payment on time. A bad credit rating is typically based on negative factors in your credit history. These negative factors can sometimes prevent you from obtaining a mortgage.
Some examples of bad credit are:
Missing a mortgage payment does count against you in some mortgages do report on your credit bureau. Many lenders will want to ensure that you are currently paying your mortgage on time. When refinancing, the mortgage lender will want to be sure that you have not missed any mortgage payments.
Learn more: Mortgage Refinance
A series of late payments on your debt obligations. Also current and past collections. It’s not the amount you pay towards your debt each month, it’s that you are at least making the minimum payment. For a credit card, the minimum payment can be quite low. It’s important to track when these payments are due injection your calendar to be sure they are paid on time. Also, you can set up an automatic payment of the minimum amount due and therefore you do not have to worry about it. Credit history is a large factor in determining if you can obtain the best mortgage rates in Ottawa Ontario.
These can have a large impact on your credit score. Many lenders want to see a period of good credit history after a bankruptcy or consumer proposal.
Having multiple recent credit checks can decrease your credit score. This may affect your ability to find the best mortgage rates in Ottawa Ontario.
If you do not have a very long credit history some lenders will look to 12 months of utility bills that you have paid on time. If you have missed any utility bills, this may affect your application.
Not paying your rent on time may also come back to haunt you when applying for a mortgage. In situations where you do not have much credit history, a mortgage lender may ask other good payment proof. For this, they may ask for a letter from your landlord saying that you have not missed any rent payments.
One may think that not having any debt is the best way to show you can manage money properly. However, a lender needs to see a proven track record and a credit history is the best way for them to see this. If you do not have any debt, that means you do not have any debt that is going towards building your credit score. This can equal a lower score or no score at all. This will negatively affect you when searching for the best mortgage rates in Ottawa Ontario. Typically a lender will want to see that you have at least two credit items that you pay on time for at least two years.
Just like having no debt can affect you, having too much debt can also affect you. If your outstanding debt is at the card limit or close to it this can affect your application. Also, if you just have a lot of debt in general. This can affect you ability to find the best mortgage rates in Ottawa Ontario.
Learn more: Bad Credit Mortgage
Learn more: How to Build Your Credit Score
I am able to negotiate extra discounts with lenders and there are many lenders to choose from. With that there are some great opportunities to find interest rates that you may not find elsewhere. I have access to unadvertised specials and exclusive discounts with many lenders.
As interest rates go down it’s important to periodically check in with your Ottawa mortgage broker. This will help you find out if there are opportunities available to switch to a lower rate. Mortgage agents in Ottawa who are proactive should be following their clients current rates compared to other interest rates available. This allows them to reach out to their clients if a better offer is available.
Many mortgages come with a penalty of only three months of interest. A new lender can usually work a penalty into the mortgage. Therefore, you do not have to pay it upfront out-of-pocket. If a lower rate presents itself, and the savings outweigh the penalty, then it may be a good idea to switch to a new lower rate.
Even a rate difference of 0.1% to 0.2% can mean thousands of dollars in interest rate savings.
It would be nice to think that your bank or lender will offer you the best mortgage rates in Ottawa Ontario upfront at renewal or at time of purchase. Unfortunately as they are a business and profits are a priority, this typically does not happen. Usually a client will have to let their lender know that they are leaving them for a better deal for their lender to come to the table with a lower rate. This would be similar to telling an employer that you are leaving to work for a competitor who is offering to pay more. Your employer may very well match the compensation offered by the other employer.
The lowest rate is not always the best option. Depending on your unique financial circumstances and goals this can affect the type of mortgage, lender and rate. As with many promotions you typically will see the lowest rate advertised. For example, walking past a store in seeing up to 70% off. Often however you will find it’s a small selection and typically not the right product for you that is at 70% off. Most of the products that are of value to you will be with a lower discount.
This is similar to mortgages where an online company may advertise one rate only for you to hear that it is not available to your situation. Also, that it may come with restrictions or does not work with your goals.
Companies advertising these low rates are doing this to attract mortgage shoppers.
When looking for a mortgage, just like looking for a car, typically the cheapest one available in Ottawa Ontario is not always the one. The cheapest option may not come with the features options and security you want. It’s important to look at each lenders options to be sure they are the right fit for you.
It’s good to make sure that your mortgage broker in Ottawa is reviewing the options of each mortgage with you. These options can include the ability to pay the mortgage off faster and the ability to refinance. Also, the penalty calculation the lender uses, the ability to port the mortgage and so on.
A lower rate with less options may end up being a very costly choice. A costly choice if needing those options down the road and having to pay larger fees or penalties.
Typically a non-resident buyer will be offered the same interest rate as a resident. Is it the down payment requirement that will change.
Non residents buying in Ottawa Ontario typically need to have 35% down with traditional banks. Alternative lenders can finance with his little as 20% down.
Learn more: Non Resident Mortgages
There are quite a few factors that can go into finding the best rate. For example, your closing date, credit score, overall risk to a lender, down payment and more.
Mortgage agents in Ottawa can shop around interest rates. This helps assure you are getting the best mortgage rates in Ottawa Ontario.
Lenders typically offer the best interest rates to those with strong income and a strong credit history. For those putting less than 20% down and getting an insured mortgage, lenders typically offer greater discounts on these rates. Insured mortgages are safer for the lender by having the mortgage default insurance.
The next best mortgage rates in Ottawa Ontario come with those who are putting down 35% or more. From there, the next most favourable rate bracket is for those putting 20% to 34% down.
The last category is for mortgages where mortgage insurer cannot assist. Example are properties over $1 million, refinances, amortizations over 25 years, those with bad credit and more.
There are so many lenders to choose from and so many options in each lender. Ottawa mortgage brokers can help navigate you through this to find the best solution for your needs.
Get your mortgage off your mind. Contact me.