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[C88]Canadian Mortgage Rates Comparison

by Carl Graeber, Car

To cover the heavy demand for more mortgages, lenders have adapted flexible techniques, like lowering down their Canadian mortgage rates and coming up with new products all the time.

A traditional Canadian mortgage rate would be a loan requiring the buyer to put down 20 per cent of the property's value in cash. Such a Canadian mortgage rate requires a big amount of money but the benefits are great.

Look around for low Canadian mortgage rates

Shopping around the Canadian mortgage rate market can cut down your down payment costs. With a little research, buyers can even access the posted Canadian mortgage rates and interest rates of large banks and get them for less, about one percentage point or sometimes more.

For instance, the Canadian brokering company in Montreal, Multi-Prets Hypotheques is currently offering their customers a five-year Canadian mortgage rate of 5.1 per cent. This is low compared to other banks posted Canadian mortgage rate of 6.5 per cent. This allows consumers to save thousands of dollars in Canadian mortgage rates and interest rates alone over the life of their loan.

Lower down Canadian mortgage rate with CMHC loans

Another way to lower down Canadian mortgage rates and minimize the amount of cash you put down is to get a Canada Mortgage and Housing Corporation (CMHC) insured mortgage. A CMHC-insured mortgage can reduce the Canadian mortgage rate and down payment to 5 per cent. That Canadian mortgage rate is 20 per cent lower than traditional mortgage loans.

With a CMHC-insured mortgage, you get a loan that is like most other loans except that you get insurance from CMHC on the additional loan amount, which is the difference between the traditional 25 per cent Canadian mortgage rate and the actual payment you put down. Getting a CMHC insurance involves only a one-time payment with Canadian mortgage rates varying between 1 per cent and 3.25 per cent of the total loan, depending on the amount of cash put down.

Low Canadian mortgage rates with non-standard mortgages

Reducing your Canadian mortgage rate can also be achieved by opting for non-standard mortgages. Aggressive financial market players like Toronto's Xceed Mortgage Corporation offer incredibly low Canadian mortgage rates and minimum down payments.

Getting a non-standard mortgage is perfect for people who have large earning powers but few capital resources. Because they have few assets to back them up, lenders might up their Canadian mortgage rates when they apply for loans. For instance, an entrepreneur whose assets are mainly invested in her business wants to apply for a loan. Her chances of a getting a low Canadian mortgage rate for a traditional loan is less compared to getting a reduced Canadian mortgage rate from a non-standard mortgage.

Lenders of non-standard loans will cover the entire purchase price of your house, leaving you to save a lot on high Canadian mortgage rates and a large down payment. However, lenders will only provide financial backing if your total monthly financial commitments (debt, interest, taxes, etc.) are no higher than 40 per cent of your monthly income.

When you do a mortgage loan, you end up paying 2 or 3 times the initial investment you have made on the property. You may be on vacation from your job, but your mortgage never takes a vacation it only keep adding up. While you cannot control the rates of borrowing, you could still end up saving some money. All that is needed is going in for the right type of mortgage, say the mortgage brokers. Next is some wise saving on your part and maybe even switching to another mortgage lender, if need be. Buyer beware that's for sure. You need to be aware of what you are getting into.

The foremost step is to choose the correct mortgage option; be it variable rate or fixed rate. With a variable interest option, you are subjecting your mortgage to the ways of the Canadian market, in particular the rising or falling interest rate. In a fixed loan, you know how much you pay and for how long you pay. Your interest rate is locked for a specified period of time. Choose the right amortization period i.e. the period required to pay off the loan. If you choose a shorter period, then you pay more per month but less in interest over the entire loan duration. And if you opt for a longer term, it is just the opposite.

If you are someone who isn't unable to pay off the debt, don't have enough equity at home for a loan or cannot afford to go in for refinancing but you could make additional payments then do it. Be consistent and on time in making some extra payments at the start of the repayment period. Paying an additional $100 under the present circumstances could make you save over $82,000 in interest payments and knock off nearly 10 years of the mortgage period! Even an additional amount of $25 would definitely help you in the long run. If you try to pay off the mortgage earlier than expected, you could be charged. Check all the fine print before entering into an agreement. Money lenders also warn of a "service charge" at the time of taking a loan. In some places, this is also called as "processing charge". When you are sending a check for the extra payment, send a letter saying that it is towards the principal repayment. Else, it may be considered as the next month's loan repayment and the interest keeps building up. Avoid making late payments as this could mean a penalty charge.

Being able to modify your mortgage loan almost always never happens. You are lucky if you can alter your existing mortgage by paying the lender a few hundred dollars and then go in for a reduced rate on the current loan. After changing, you repay the same mortgage. Refinancing is however, an option that you could consider. Look for a mortgage lender who lets you pay off on a bi-weekly basis. Obviously, because you are clearing off the debt at a faster pace, the interest rates would be slashed. However, with this scheme you start all over again. If this is the only alternative for you, speak with your current mortgage lender; you could be offered "streamlined" refinancing which requires less money, paperwork and time than other lenders would need. A new lender may offer you lower rate but higher fees as compared to your current system. You would've to see which works better for you. All in all, saving up on your hard earned money is tough in these times but not impossible, opine the Canadian real estate experts.

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Both Carl Graeber & D Morris are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.

Carl Graeber has sinced written about articles on various topics from Travel Packages, Finances and Cosmetic Surgery. . Carl Graeber's top article generates over 4400 views. to your Favourites.

D Morris has sinced written about articles on various topics from Finances, Mortgage and Finances. David Morris has many years in the lending business and has been a successful real estate investor. He is able to think outside the box and will provide you with the road to the best rates and terms in the Canadian market.. D Morris's top article generates over 6600 views. to your Favourites.