In Canada, renters and even people who own their own homes want to save enough money for down payments. It's easy to understand why. Mortgage rates in Canada are going down, and home prices are going up.
To meet the high demand for more mortgages, lenders have come up with flexible ways to do business, such as lowering their Canadian mortgage rates and always coming up with new products.
For a traditional Canadian mortgage rate, the buyer would have to put down 20% of the property's value in cash. A Canadian mortgage rate like this costs a lot of money, but it's worth it.
Look around for mortgage rates that are low in Canada.
You can save money on your down payment by shopping around for the best Canadian mortgage rates. With a little research, buyers can even find the posted Canadian mortgage rates and interest rates of large banks and get them for about one percentage point or more less.
For example, Multi-Prets Hypotheques, a Canadian brokering company in Montreal, is currently offering a five-year Canadian mortgage rate of 5.1%. This is low compared to the Canadian mortgage rate posted by other banks, which is 6.5%. This lets people save thousands of dollars just in interest rates and Canadian mortgage rates over the life of their loan.
With CMHC loans, Canadian mortgage rates can be brought down.
Getting a Canada Mortgage and Housing Corporation (CMHC) insured mortgage is another way to lower Canadian mortgage rates and reduce the amount of cash you have to put down. With CMHC insurance, the Canadian mortgage rate and down payment can be lowered to 5%. The rate on that Canadian mortgage loan is 20% lower than the rate on a typical mortgage loan.
With a CMHC-insured mortgage, you get a loan that is like most other loans, except that you get insurance from CMHC on the extra loan amount, which is the difference between the traditional Canadian mortgage rate of 25% and the actual down payment you make. CMHC insurance only requires a one-time payment, and Canadian mortgage rates range from 1% to 3.2% of the total loan amount, depending on how much cash is put down.
Low mortgage rates in Canada for mortgages that aren't the norm
You can also lower your Canadian mortgage rate by going with a non-standard mortgage. Aggressive players in the financial market, like Toronto's Xceed Mortgage Corporation, offer Canadian mortgage rates and down payments that are very low.
People who make a lot of money but don't have much money on hand should get a non-standard mortgage. When they apply for loans, their Canadian mortgage rates might go up because they don't have many assets to back them up. For example, a business owner who has most of her assets in her business and wants to apply for a loan. If she gets a traditional loan, her chances of getting a low Canadian mortgage rate are lower than if she gets a non-standard mortgage.
Non-standard loan lenders will pay for the whole price of your house. This will save you a lot of money on high Canadian mortgage rates and a big down payment. But lenders will only give you money if your monthly financial obligations (debt, interest, taxes, etc.) don't exceed 40% of your monthly income.
