Although there is more than one feature to consider when choosing the right mortgage, the interest rate is certainly the focal point. At Homefund, we always publish the lowest rates available. Through our vast network of lenders, we can deliver to you quickly any special promotions that are available and make recommendations that will save you thousands of dollars on your mortgage.
“You come to us for the rate, you’ll be back for the service!”tm
Date updated: May 24, 2018
|Term||Posted Bank Rates||Homefund Best Rates|
|5 year Variable Rate||Prime – 0.50%||Prime – 1.00%|
|Secured Line of Credit||Prime + 1.00%||Prime + 0.50%|
Rates are subject to change at any time without notice. Contact our office for other mortgage products. Rates based on Prime Residential. No Fees For Qualified Applicants.
Historical Rates in Canada
The chart below has tabulated the conventional mortgage 1 and 5 year posted fixed rates since 2005, along with the Bank of Canada overnight lending rate. If you are interested to see what these rates were prior to 2005, Bank of Canada has records dating back to 1980 and 1973 respectively, and as early as 1935 for the Prime Lending Rate. The rates charted below are Bank Posted Rates, but actual approved rates are typically discounted (please refer to our rate table above). A study conducted on behalf of CAAMP for a period ranging from 2006-2010 estimates that the average discount on a 5 year mortgage was 1.40% below the Bank Posted 5 year fixed rate.
Fixed vs Variable Rate Mortgages
One of the more important decisions that borrowers are usually faced with right from the start is choosing a fixed rate or variable rate mortgage term. This involves making a prediction of where future rates will be – not an easy task to say the least. Many smart and well respected economists have been providing such forecasts and predictions, and over the last 20 years I’ve been in the mortgage industry, I can’t tell you how often they were off the mark. So, how can a first time buyer, or even repeat buyer, decide with confidence. Since we can’t predict with accuracy, we should at least examine and remove as much risk as possible. We can use past and present mortgage rate trends and conditions to perhaps provide some guidance for future tendencies, but more importantly, we believe that your particular risk tolerances should be examined as a litmus test to choosing the type and term of mortgage.
Our national association, CAAMP, commissioned Maritz Research, and from the November 2013 study, they found that 66% of mortgage holders (about 3.7 million out of 5.58 million) have fixed rate mortgages, 26% (1.5 million) have variable and adjustable rate mortgages, and 8% (about 425,000) have “combination” mortgages, in which part of the payment is based on a fixed rate and part is based on a variable rate.
In the table below, among mortgages for homes that were purchased during 2013 to the present, fixed rate mortgages were chosen much more frequently, with the share of 82%. The share for fixed rate mortgages is similar for first time buyers and for repeat buyers. For mortgages that have been renewed in 2013, the fixed rate share of 66% is identical to the overall share; variable rate mortgages are much more frequent for those who have renewed recently than for those who have purchased recently.
Percentage of Mortgages by Type,
For New Purchase Mortgages and Recent Renewals
|Variable or Adjustabe Rate||9%||24%||26%|
|Source: Maritz survey for CAAMP, Fall 2013|
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