If you plan to purchase a home in Ottawa, one of the things on your mind may be finding the right mortgage. The mortgage rates in Ottawa are low at the moment. Although located in Ontario, Ottawa has the lowest average housing price among the three major cities in the province. Whether you commute to an area in neighbouring Quebec or work in the city, you can always find affordable housing options. We will be discussing the housing market in Ottawa, the mortgage rate trends, and answering some frequently asked questions about mortgages.
Comparing Ottawa Mortgage Rates
Choosing a mortgage is a critical financial decision. You should compare the interest rates, penalties, repayment terms, and more before making a final decision. Your credit score, the down payment amount, and the property purchase price will also impact your mortgage decision.
The following factors can help you choose the best mortgage option:
Closing Costs and the Land Transfer Tax
Closing costs and the Ontario Land Transfer Tax are two things you should not forget about when purchasing a home in Ottawa. The Land Transfer Tax costs an extra 0.5 to 2 percent of the purchase price. You may need to save extra money to cover the taxes and closing costs on top of the down payment.
Rebates for First-Time Homebuyers in Ottawa
As a first-time homebuyer in Ottawa, you may qualify for a tax rebate of up to $4000. This rebate will only apply to a home purchased in Ontario. If you buy a home in nearby regions like Gatineau or Quebec, you may not qualify for this rebate because their Land Transfer Tax is lower than Ontario. However, all first-time homebuyers can still reap some rewards thanks to Canada’s first-time homebuyer program.
The Best Mortgage Brokers in Ottawa
Mortgage Maestro can help you secure the best interest rates in Ottawa. We work with a trusted network of more than 50 lenders and, our highly-trained brokers work hard to create tailored mortgage solutions to meet your financial requirements. We will help you every step of the way to create a stress-free experience, regardless if you are purchasing a new home, looking for a Home Equity Line Of Credit, refinancing or renewing your mortgage or looking for reverse mortgage options.
Frequently Asked Questions
How much money will I save when comparing mortgage rates?
The total amount you pay for your mortgage can change even with a slight difference in your interest rate. For example, if your mortgage is $500,000 over 25 years, you will spend an extra $100- $125 per month on your mortgage if the interest rate is 0.3% higher.
Are mortgage rates in Ottawa higher than in any other city?
It will depend on the city you are comparing to Ottawa. Many factors come into play including, the competition between lenders. Higher competition between mortgage lenders can lead to lower interest rates.
Fixed vs. Variable rates: What is the difference?
Variable mortgage rates are lower than fixed-rate mortgages but, the rates on variable mortgages fluctuate with changing market dynamics – specifically, the Bank of Canada’s lending rate. This means your mortgage interest rate may go up or down during the term of your mortgage. While your regular payment will remain constant, the change in the interest rate will impact the amount of principal you pay off each month. When rates on variable interest rate mortgages decrease, a larger portion of your regular payment is applied to the principal; whereas, if rates increase, more of your regular monthly payment will go towards the interest. Rates on fixed mortgages do not change for a pre-determined time (the mortgage term), the maximum being 10 years.
Should I get a pre-approved mortgage?
Getting pre-approved is a great idea. It will help you gain more confidence in making your purchase decision without worrying about a mortgage approval. Pre-approval does not always equal a definite guarantee but, it is also offered free of cost by most lenders.
Mortgage Maestro can help you find the best interest rates in Ottawa.