Canadian mortgage rate could be either fixed rate or variable rate.
Interest rate can be fixed for a period of time (the term). Example: if you have chosen 6%
fixed rate for 5 years, no matter what happens in the market, you stay with 6% for 5 years.
If rate goes down, you loose. If rate goes up, you win.
Variable rate means you choose a rate that will fluctuate according to "prime rate"
which is the rate lenders give to their best customers. Prime rate changes from time
to time at the discretion of the Canadian Government Bank of Canada. Most lenders will offer
a variable rate which is below Canadian Prime rate. You will see variable rate such as Prime minus half
or Prime minus one percent.
Canadian mortgage rate is typically quoted for term of 6 month, 1 year, 2 year,
3 year,4 year, 5 year, 7 year and 10 year. If you look in the newspaper you will
see Canadian mortgage rate quoted everyday for the above terms.
These rates are called "Posted Rate". Invariably Canadian lenders will offer a rate lower than the
Posted Rate because of the
highly competitive Canadian mortgage rate market. So be sure you ask and negotiate.
You can save anywhere from half to one and a half percent.
Note that Canadian mortgage rate quoted by Mortgage Brokers is way below the "posted rates" quoted
by the banks. You should ask your bank for the same rate quoted by the Canadian Mortgage Brokers
or close.
Please check the mortgage rates from several financial institutions or lenders and also from
Mortgage Brokers who really represent a large number of banks and financial institutions.
Remember these are posted rates. Ask for the discount rates.
Nowadays mortgage rates can be checked anytime on line from all the Canadian banks or
mortgage brokers.
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