mortgages near me

How to Find the Best Mortgages Near Me

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By Lucas Samuels

Finding the best mortgage in Ontario is a matter of scoping out the lowest available rate for a loan that best suits your needs. And generally speaking, this is an exercise best left to a mortgage broker. 

If you want to find the best mortgage as soon as possible — and without breaking the bank — your best bet is to find a broker who offers free consultations. That way you can ask questions, see reference documents, and speak with a professional who can explain in detail how the mortgage process works. If you’re not in a rush, you could also consider using online mortgage resources. 

Committing to a mortgage is very likely one of the largest financial decisions you’ll ever make. It's also one of the largest itemized deductions on your tax returns, which makes it attractive from an investing perspective. If you’re ready to start your search for the best mortgages out there, check out our tips for choosing the right loan for you.

What factors impact mortgage prices?

Mortgage interest rates are set by lending institutions and depend on a variety of factors, including:

  • Your credit score: If you have poor or no credit, most lenders will charge you a higher interest rate. You can check and track your credit score for free with companies such as Borrowell.
  • The lending institution: Rates at banks, credit unions, and online lenders may differ greatly based on their criteria for lending capital to customers. Some lenders have special rates for medical professionals or teachers, which are worth checking out if applicable to you.
  • The type of loan you choose: For example, conventional loans and government-backed mortgages are the types of loans most often available to borrowers. With a conventional mortgage, you receive an interest rate that can be adjusted periodically over the life of your loan.
  • The current market value of your home, if you already own one: This is usually the biggest factor lenders use to determine your mortgage rate.

Historical Canadian mortgage rates

Historical Canadian mortgage rates were hovering close to 6% interest during the Great Depression. Today, the interest rate has fallen to 0.25% in 2021. The average interest rate on a 30-year fixed-rate mortgage in Canada is 2.96%. In addition, the average rate of a five-year fixed mortgage is 4.79% as of July 2021.

How to get the best mortgages near me

Before beginning to compare mortgage rates, it’s important to know that the best mortgage rates depend heavily on the following criteria:

1. Mortgage vs. refinance

Refinancing typically costs more than purchasing since it’s considered a higher risk because refinancing loans can’t be default insured. 

Default insurance protects the lender in case the borrower doesn’t pay their mortgage fees. It can either be optional (if a borrower chooses to purchase the insurance) or mandatory (if the borrower did not pay at least a 20% down payment, requiring a “high-ratio” mortgage).

2. The term

Consider the term of the mortgage you're looking to secure, as this is one of the most important aspects of your home loan. It will determine how long you have to repay the loan, and therefore the amount of interest you'll pay.

3. The LTV

"LTV" stands for Loan to Value and is the part of a mortgage that represents the percentage of the house that the mortgage covers. This is important when you're choosing a mortgage, as it will determine how much you can borrow. In almost all cases, you want to borrow as little as possible, so that you don't pay more in interest than you receive in actual payments. For instance, if you have a $300,000 house with a $200,000 mortgage, your LTV is 70% ($200,000 / $300,000 = 70%).

4. The mortgage amount

A larger mortgage means the deal is more profitable for the lender and will often mean a better interest rate.

5. Your property type

Typically, better mortgage rates are offered for people living in the property being financed. Non-owner-occupied properties tend to have higher rates as they are considered a higher risk to the lender. Properties such as cottages that are less liquid do not often qualify for the best rates because of the resale risk if a borrower defaults.

6. Your province

Where you’re purchasing a home can have a significant impact on your mortgage rate. More competition in a larger market means there will usually be lower mortgage rates. For example, Toronto’s interest rates are lower than the best mortgage rates in Halifax.

7. The amortization

The best mortgage rates come from mortgages that are set for 25 years or less. Longer payback periods often include surcharges from the lender. Most mortgage lenders have amortization minimums, such as 15 or 20 years. If the minimum is not met, the borrower doesn’t qualify for their rates.

8. Your qualifications

The most qualified borrowers get the best rates. Qualifications include the borrower’s credit history, employment status, income, and down payment amount.

Finding the best mortgages near me

The business of home loans is booming — and for good reason. For first-time homebuyers, it’s a convenient way to get into the market. For seasoned investors, it can be a smart way to generate profits, further building wealth. But as with all things, there are risks and benefits to home loans, and the rates available vary greatly depending on your creditworthiness.

The best strategy is to do your homework and then shop for a mortgage lender, using the same criteria you would if you were buying a car or house. Get quotes from several lenders, and then compare them to find the lender whose rate is the best fit for you. Alternatively, you can work with a real estate company like Properly who can help you on your journey to find the best mortgage rates and make the home buying process a lot less stressful.

Properly is a Canadian tech-enabled real estate brokerage transforming the home buying and selling experience as the only service in Canada that helps homeowners to buy before they sell.