Calgary Mortgage Rates: Everything You Need to Know
Many Calgarians are eagerly starting to put the pieces together in order to purchase their first homes, while many families are also looking to upgrade to something larger. With a busy housing market, we encourage you to get the ball rolling as soon as you can in order to give yourself plenty of time to get everything sorted out in terms of securing your mortgage, finding a home, and finally settling into your new house.
There’s a lot to learn and a lot to do, and we’re happy to help walk you through the process of buying a home, whether it’s your first home or you’re just hoping to take advantage of all of the best possible mortgage offers and options. It can be very beneficial to have a third party to help explain everything to you. Our goal is to demystify mortgages in Calgary so that you can find the perfect fit for your needs.
Challenges and Benefits for First Time Home Buyers in Calgary
There are certain challenges that face first-time home buyers, but there are also benefits that can help them when buying their first homes in Calgary.
Let’s start with some of the challenges that are faced by home buyers in Calgary and how to overcome these hurdles.
- Saving up a down payment: You’ll need a minimum down payment of 5% of the cost of the home in order to get a mortgage, but if you’re able to put down 20%, there are financial benefits such as not needing to buy mortgage insurance. A higher down payment gives you more equity in your home right off the bat, but it can be more challenging to save up.
- Stress tests: There are certain stress tests put in place by Canadian banks to ensure that people are able to afford their mortgage payments, even if interest rates rise in the future. These stress tests translate to a higher barrier of entry for people who were right on the line of being able to qualify for a mortgage or not, meaning they’ll need to seek out less expensive homes or save up a larger down payment. On the other hand, for people who are able to easily afford their home/mortgage, this could result in less competition in the housing market.
- Credit scores and income: Your credit score and income level will also impact the amount that you’re able to borrow and spend on a new home. If your income isn’t super high, or if you have some problems with your credit score, it may still be possible to purchase a home, especially with a bit of planning ahead and ensuring that all of your ducks are in a row.
Here’s How We Can Help
Before you start applying for mortgages, we can help ensure that your credit score is accurate and that there aren’t any errors or easy fixes that are holding it down. We can look at your financial situation and help you structure things to increase your ability to purchase the home of your dreams, along with helping you to navigate various benefits such as the First Time Home Buyer Incentive, which helps to reduce your monthly payments.
Dealing with big banks can be frustrating, confusing, and you won’t always leave with the result you want. We have years of experience in navigating the world of mortgage lending, and we’ve helped countless Calgarians get settled into their new homes, even if they didn’t think it would be possible. We understand what mortgage lenders look for before they write a mortgage, and we can help ensure that you’re doing everything you can to fit their criteria, even if big banks haven’t always treated you favourably.
If you’re refinancing or renewing your mortgage, allow us to show you how much better it can be this time around. We’re working for you in your best interest, and we have access to a variety of tools and solutions that banks don’t offer.
If you’re still a ways away from starting your mortgage search, we can use this time to improve your credit score to help you gain access to better Calgary mortgage rates than you would have otherwise been offered. Unlike the banks, which offer a variety of different products and services and don’t really see you as an individual, we understand the importance of helping each and every person to navigate the confusing world of finance to arrive at the destination of owning their own home.
Calgary Mortgage Rates and Closing Costs
Beyond the cost of your downpayment and your mortgage payments, there are also closing costs when purchasing a home in Calgary (or anywhere else, for that matter.) These closing costs can vary depending on many factors, but here is an overview of approximately what you can expect to pay in additional closing costs.
Taxes: There is PST charged on the cost of mortgage default insurance, which you are required to purchase if your down payment is less than 20%. This is an upfront cost that you’ll pay at closing, although the cost of the insurance itself is added on to your mortgage, so you don’t have to pay it upfront. On newly built homes or properties, there is also a 5% GST (although you may qualify for a rebate for a portion of this cost.) On the plus side, there is not a land transfer tax in Calgary, which helps keep closing costs down.
There are other fees such as home insurance, property taxes, a real estate lawyer, moving costs, and more that you will need to consider and factor into your budget. Closing costs can vary quite a bit, but as a rough rule of thumb, they can range between 2% on the lower end, upwards of 5% on the higher end.
Finding the Best Mortgage Rates Calgary has to Offer
When you’re shopping around for the best mortgage rates in Calgary, there’s more to it than simply looking for the lowest % and signing on the dotted line. It’s important to look at the fine print, to understand the terms, to think about how your financial situation could change over the years, and to choose the mortgage that makes the most sense for you overall. It’s not always a matter of finding the absolute lowest rate if the mortgage with the lowest rate doesn’t suit you in regards to how it’s structured overall.
Manulife One Mortgage Rates in Calgary
Manulife One is an excellent product for people who value flexibility from their mortgage. It allows you to modify your monthly payments as you go rather than being completely locked in. In uncertain times, this could be the difference between being able to meet your obligations or not, for example, if you’re without work for a stretch of time. In prosperous times, it means you can pay more money towards your mortgage in order to have your house paid off sooner and to save money on interest.
Throughout the course of a mortgage, which is typically decades, most people are bound to face times of prosperity and times of uncertainty. Some households will lock themselves into a mortgage with monthly payments that assume they won’t run into any hurdles over the next 25 or 30 years, which can be wishful thinking. As such, a product like Manulife One, which affords homeowners a bit more flexibility, can be a huge benefit for Calgary families.
Manulife One mortgage rates aren’t necessarily the lowest posted rates that you’ll find, but that’s because they offer a ton of flexibility that can save you money in the long run. For example, with a regular mortgage that has a fixed rate of repayment each month, you’re limited in how you’re able to make additional payments, and the cash sitting in your other accounts doesn’t do anything to help you.
On the other hand, with Manulife One, your bank accounts and your mortgage, and your HELOC are combined into one single account. This means that when your paychecks or other income are deposited, they land in your Manulife One account and save you money in interest payments for as long as they’re in your account. If you had a conventional mortgage and a regular checking account, you would be paying the full amount of interest on your mortgage. Your HELOC can also be used to acquire an investment property.
Comparing Mortgage Interest Rates in Calgary
As mentioned previously, there’s more to a great mortgage than just looking at the interest rates, but interest rates are still something to consider.
As you’re comparing Calgary mortgage rates, remember to pay attention to the rest of the terms of your mortgage to ensure you’re finding a product that suits you, your needs, and your financial goals for decades to come with enough flexibility to keep up with a changing world.