Best Mortgage rates in Ontario?

What Is an Ontario Mortgage?

Owning a home in Ontario is a dream for many Canadians given the economic prosperity, lifestyle, and quality of life across the province. Homes in Ontario are assets and usually appreciate in value over the long term. In order to purchase a property in the province, a mortgage is often required. Obtaining the mortgage covers the shortfall, difference between the property value and down payment, in financing. Or perhaps you want to renovate your home, or pay off credit card debt, taking out additional equity out of your existing home in the form of a mortgage can achieve this.

An Ontario mortgage is a loan made to Ontario residents. Under the provisions of the loan, you borrow money from the lender and pay it back (including interest) over a set time period. In Ontario you can finance your mortgage through a chartered bank, mortgage broker, credit union, trust company, or other lenders.

The interest charged on a mortgage is called the mortgage rate. When you make a mortgage payment, part of it will go toward paying the interest, with the rest going towards paying your mortgage principal. Only the portion that goes towards your principal will reduce the balance of the mortgage.

Shopping around for the best mortgage rates in Ontario

Mortgage rates in Ontario vary across lenders. There are dozens, if not hundreds, of different mortgages to choose from. Therefore the decision regarding which mortgage to go with can be quite overwhelming and shopping around becomes increasingly important. The Kanetix.ca mortgage rate comparison service takes the stress out of the mortgage acquiring process by doing the shopping around on your behalf! We compare Ontario mortgage rates across several brokers and lenders, making it easy for you to choose the best mortgage with the lowest mortgage rate. You will also not see any posted rates on our website. These are rates that are generally advertised by lenders and are on the high end of what these lenders are able to offer. The mortgages rates shown on Kanetix are special discounted rates, yet another feature which helps us provide great service to our Ontario customers.

We are partnered with some of the biggest and best known mortgage brokers across Ontario. These partnerships allow us to feature great rates to our Ontario customers. Once you're ready to secure a rate online, simply complete our quick online application or give us a call and one of our experienced partner mortgage agents will help you obtain the necessary mortgage and make owning your dream home a reality!

In case you want to learn more about mortgages and mortgage features, our Infocentre provides mortgage information to keep you informed, and a mortgage glossary to teach you common finance terms, and a mortgage forum to ask and answer questions.

Why should every Ontario Mortgage buyer use Kanetix?

• A variety of mortgage products and lenders/brokers to choose from
• The best mortgage rates in Ontario
• Experienced mortgage agents ready to assist you
• Ability to secure rate online and recieve a mortgage electronically
• You'll get a mortgage rate guarantee certificate
• It's secure, takes minutes and is absolutely free!

Type of Ontario mortgages - Fixed, Variable, Closed, Open

Aside from the mortgage interest rate, it is also important to consider the type of mortgage that best suits your needs. Is it a variable rate mortgage, fixed rate mortgage, closed mortgage, or an open mortgage? A fixed mortgage has a set mortgage rate. Alternatively, a variable mortgage has a rate that is adjusted with the prime lending rate and could change throughout the term of the mortgage. Whether you select a fixed mortgage or a variable mortgage for your Ontario property will depend on various factors: your risk tolerance, current level of interest rates, expected future mortgage rate changes and the difference between variable and fixed mortgage rates.

Mortgages can also be open or closed. While you can pay off an open mortgage at any time, a closed mortgage has pre-payment restrictions. If you pay more than the permitted amount on a closed mortgage, you would incur a penalty. However, pre-payment restrictions on closed mortgages are not as limiting as you might think. You still have the flexibility of increasing your monthly payment up to a certain percentage and making lump sump payments up to a maximum percentage of your mortgage amount in a given year. Due to these restrictions however, closed mortgages tend to have lower mortgage rates relative to open mortgages. Whether you choose a closed or open mortgage will depend on your anticipated cash flows and expected future payment behaviour. It is generally only recommended to go with an open mortgage if you are expecting to take advantage of its pre-payment privileges.

Try the Kanetix.ca online mortgage rates comparison service today to browse the best Ontario mortgages, Ontario mortgage rates, Ontario mortgage lenders, Ontario mortgage brokers and Ontario mortgage deals.

The difference between High Ratio and Conventional mortgages in Ontario

In Ontario, and the rest of Canada, depending on how big of a down payment you make when purchasing a home or how much equity you have in your property when refinancing determines whether you would qualify for a conventional or high ratio mortgage. If the loan-to-property value is greater than 80 per cent (down payment/equity to property value less than 20 per cent) then you'd have to go with a high ratio mortgage. If the loan-to-property value is less than 80 per cent you'd be able to go with a conventional mortgage. The difference between the two types of mortgage loans is that mortgage default insurance has to be paid on all high ratio mortgages while it's not necessary for conventional mortgages. This insurance is meant to protect the lenders in case of borrower default. The cost of the insurance generally ranges between 1.75 per cent and 2.75 per cent of the mortgage amount depending on the size of the down payment/equity and is added to the total mortgage amount. For more information please see the following websites of the companies that provide mortgage default insurance in Canada: Canada Mortgage and Housing Corporation, Genworth Capital, and Canada Guaranty Mortgage Insurance.

Key features of mortgage loans in Ontario

Low rates should not be the only deciding factor when comparing mortgages. The following features should also be taken into account:

• Pre-payment limitations (for closed mortgages only) - Closed mortgages include the ability to make annual lump sum payments up to a maximum percentage of the mortgage amount and the ability to increase the monthly payment by a certain percentage, up to a specified maximum. The higher the per cent limits, the more flexibility you have with the mortgage.
• Rate hold period - Period over which the lender will guarantee you the mortgage rate. The longer the period the better since it provides longer protection in case of rate increases.
• Amortization period - Period of time over which the mortgage will be paid off (different than term). Certain lenders will provide longer amortization periods compared to others. The amortization period chosen will depend on your person circumstances.

All of the mortgage products listed on our website have full descriptions of features. Try out our mortgage rate comparison service today to find the best mortgage rates in Ontario!

Factors that influence the lowest mortgage rate in Ontario

While shopping around for the best mortgage rate you'll encounter not only a wide variety of rates that vary across lenders but also across products, variable vs. fixed, closed vs. open, etc. There are a couple more factors that certain lenders take into account when setting rates that you should be aware of.

• Credit score - Certain lenders will offer rate tiers based on the credit score. The higher the credit score the better the rate you would potentially qualify for
• Mortgage timing - Certain lenders will offer a rate discount if the mortgage is obtained within a certain period of time (i.e. within 30 days, within 90 days, etc.)

It is important to be aware of all factors that could have an affect on a rate you receive from an Ontario broker or mortgage lender. It is however important to be honest and provide accurate information in order to ensure a seamless mortgage approval process.

If you're an Ontario resident, you can use our mortgage rate comparison service to browse mortgages, secure rates, and get approved for Ontario mortgage loans through a secure and simple application process.

Mortgage Brokers in Ontario

Kanetix works with some of the largest Ontario mortgage brokers to bring you the best mortgage rates in the market. Browse our competitive rates and if you're ready to proceed with securing a rate, one of our partner mortgage brokers will be happy to assist you with your mortgage needs. Dealing with mortgage brokers provides peace of mind to consumers since these are accredited professionals who know the ins and outs of mortgage approval and financing.

KANETIX's quick and easy mortgage comparison service is available in New Brunswick, Saskatchewan, Manitoba, Nova Scotia, Prince Edward Island, Newfoundland and Alberta.

Province of Ontario General Information

• Population (2011): 13.4 million (38.8per cent of Canada)
• Population Makeup (2006): 71.7 per cent Canadian born; 28.3 per cent foreign born
• Average annual population growth (2001 - 2011): 1.2 per cent
• Projected population growth: 32.7 per cent, or almost 4.4 million over the next 25 years
• Median family income (2010) : $71,540
• GDP (August 2012): $639 billion (37.1 per cent of Canada)
• Unemployment rate (August 2012): 7.8 per cent
• CPI Inflation (August 2012): 3.1 per cent

Sources: Stats Canada and Ontario Ministry of Finance.

Province of Ontario Real Estate Market

• Housing starts (2011): 67,821
  • Year-over-year change: 12.2 per cent
• Average Residential resale price (Q2 2012 YTD): $394,693
  • Year-over-year change: 6.7 per cent

Existing home sales are expected to moderate during the remainder of 2012 due to tighter mortgage market conditions. However an improving job market and low interest rates should help maintain existing home sales near recent year highs in 2013. Overall price growth should slow down.

Housing starts will continue growing for the rest of 2012; it's expected to, reach 75,100 starts, before cooling in 2013. Overall housing activity is expected to hold up better in northern and southwestern Ontario communities.

Sources: CMHC

Province of Ontario Mortgage Market

Mortgage rates are expected to remain low in the short term. For the rest of 2012, the one-year posted mortgage rate is expected to be in the range of 3.2 per cent - 3.4 per cent. The five year posted mortgage rate is expected to be in the range of 5.2 per cent - 5.3 per cent. For 2013, the one-year posted rate is expected to be in the range of 3.5 per cent - 4.2 per cent and the five-year posted rate is expected to be in the range of 5.1 per cent - 5.4 per cent. The higher forecasted rates in 2013 reflect more solid economic growth expectations in 2013.

Sources: CMHC

This summary is for informational purposes only and should not be relied upon without verification by contacting a mortgage professional.

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