On the hunt for a budget-friendly mortgage? You’ve just struck gold. Welcome to Canada’s most comprehensive guide on mortgage rates, designed to help you secure top-tier pricing from mainstream lenders and rate aggregators—provided their rates are up to standard.

Having access to a broad selection of reputable lenders significantly improves your chances of landing the best mortgage deal. But finding the lowest rate isn’t the end of the journey. If you want to minimize your total borrowing costs, you need to understand the key factors influencing mortgage pricing and how to negotiate effectively.

Below, we’ll walk you through the ultimate playbook for securing the lowest overall borrowing costs in Canada.

How to Qualify for the Lowest Mortgage Rates

Mortgage Insurance and Its Impact on Rates

The lowest mortgage rates typically require default insurance. Why? Because mortgage insurance acts as a safety net for lenders, reducing their risk and allowing them to offer better pricing.

Most new mortgages with less than a 20% down payment require insurance by law. While it might seem counterintuitive that putting less money down leads to lower rates, insured mortgages actually lower costs and risks for lenders compared to uninsured financing.

Quick tip: If you switch lenders at maturity without increasing your loan amount or amortization, ensure the new lender keeps your insurance in force—this can help you qualify for lower rates today and in the future.

Insurable Mortgages: The Next Best Option

Besides borrower-paid default insurance, lender-paid insured mortgages—also known as "insurable" mortgages—offer another way to secure lower rates. Insurable rates apply to conventional mortgages that meet the following criteria:

• At least 20% equity

• Amortization of 25 years or less

• An owner-occupied home purchased for under $1 million

Insurable mortgages often come with rates that are 10–25 basis points (bps) lower than uninsured rates. (One basis point = 0.01% or 1/100th of a per cent.)

Quick tip: A 10 bps rate savings can keep over $470 in your pocket over five years for every $100,000 borrowed with a 25-year amortization.

Key Requirements for the Best Prime Mortgage Rates

To qualify for the best mortgage rates in Canada, you’ll typically need:

• A credit score of 720+ (some lenders allow lower scores, but 720+ is a solid benchmark)

• A clean credit report (no recent missed payments or derogatory marks)

• Monthly housing costs below 39% of gross income (including mortgage payments, property taxes, heating, and half of condo fees, if applicable)

• Total monthly debt load under 44% of gross income (including housing costs, loans, alimony, child support, and 3% of any credit card balances)

• Provable income (via job letter, pay stubs, or tax documentation for self-employed borrowers)

• A closing date within the lender’s rate hold period (some of the best rates require closing within 30 days)

• A marketable home (rural or unconventional properties may not qualify for the lowest rates)

Quick tip: The government’s mortgage stress test often determines approval rates. As of November 21, 2024, the stress test no longer applies when switching lenders, provided the loan amount and amortization remain the same.

Understanding Rate Surcharges

If you’re a non-prime borrower, be prepared to pay significantly higher rates. Non-prime borrowers include those with:

• Bad or no credit history

• Hard-to-prove income

• High debt ratios

• Offshore residency

• Unconventional properties

These factors can add 100–200 bps or more to your rate, plus additional lender and/or broker fees (typically 1%+ of the mortgage amount). Here are some common rate surcharges:

• Amortizations over 25 years (if uninsured): +10 bps

• Amortizations over 30 years (if uninsured): +100 bps or more, plus lender fees

• Non-owner occupied rental properties: +10–25 bps

• Vacation homes: +10–25 bps

• Pre-approvals: +0–25 bps (most pre-approvals don’t close, so lenders charge extra to offset costs)

Quick tip: Only non-prime lenders offer amortizations over 30 years. If you need long-term flexibility, consider a home equity line of credit (HELOC)—its interest-only payments have an indefinite amortization.

How to Negotiate the Best Mortgage Rate

Securing the best mortgage rate takes strategy. Here’s your eight-step survival guide for mortgage negotiations:

1. Confirm whether you qualify for prime rates using the checklist above.

2. Decide on the best mortgage term (seek professional advice if needed).

3. Determine your mortgage type: Insured, insurable, or uninsurable.

4. Shortlist promising rates and call lenders to assess their terms.

5. Consult an experienced mortgage broker to see if they can beat those rates.

6. Ensure the lender’s terms match your five-year financial plan.

7. Compare the overall cost of different options beyond just the rate.

8. Apply and lock in your rate to protect against potential rate increases.

Quick tip: High-volume brokers often get better pricing from lenders. Choose a full-time broker who’s closed $10M–$25M in mortgages over the past year.

Key Mortgage Features That Matter More Than the Rate

The lowest rate isn’t always the best deal. Flexible mortgage terms can save you thousands down the line. Here are some key features to look for:

1. Portability

If you might move before your mortgage matures, ensure your loan is portable—this lets you transfer it to a new home without penalties.

2. Mid-Term Refinancing

If you might need to borrow more later, ensure your lender allows mid-term refinances without hefty penalties.

3. Prepayment Privileges

If you plan to make extra payments, check for flexible prepayment options. Some mortgages allow 10–30% annual prepayments, while low-frills mortgages may restrict you.

4. Fair Prepayment Penalties

If you need to break your mortgage early, penalties can vary widely. Big Six banks often use higher penalties than fair-lending institutions.

5. Rate Drop Policies

Some lenders let you reset your rate if market rates drop before closing. Others don’t offer this feature.

6. Bridge Financing

If you’re buying a new home before selling your old one, check if your lender offers cost-effective bridge loans.

7. Cash Rebates

Some banks offer cashback incentives (sometimes over $4,000), which can reduce your borrowing costs—but they may claw this back if you break the mortgage early.

Final Thoughts: Ask These 7 Questions Before Locking In Your Mortgage

1. Can you buy down my rate further?

2. How long is my rate guarantee?

3. What are the prepayment terms and penalties?

4. How is the interest compounded?

5. Are there reinvestment fees if I break the mortgage early?

6. What’s your rate drop policy if rates fall before closing?

7. Do you cover all legal and appraisal fees when switching lenders?

A well-negotiated mortgage can save you thousands over its term. By understanding mortgage pricing, qualification requirements, and key lender terms, you can confidently navigate the mortgage landscape and secure the best deal possible.

The Allure and Challenges of Loft Living: A Buyer’s Guide

Loft apartments have long been associated with creative spaces, urban charm, and industrial aesthetics. Whether you’re considering purchasing a true loft in New York City or a converted industrial unit in Hamilton, Ontario, understanding the benefits and challenges of loft living is crucial. In this guide, we’ll explore what makes lofts unique, where to find them, and the key considerations before making a purchase.

What is a Loft Apartment?

A “true loft” refers to an apartment originally designed for industrial or commercial use that has been converted into a residential space. These spaces typically feature:

• High ceilings, often over 12 feet

• Large, factory-style windows allowing ample natural light

• Open floor plans with few interior walls

• Exposed beams, ductwork, or brickwork that preserve the industrial aesthetic

Unlike traditional apartments, lofts offer a unique blend of history and modernity, allowing homeowners to create personalized, expansive living spaces.

The Appeal of Loft Living

Loft apartments have gained popularity for several reasons:

1. Aesthetic and Design Potential

   The industrial-chic appeal of lofts is one of their biggest draws. The high ceilings, large windows, and open floor plans provide a sense of space and flexibility. Homeowners can create custom layouts, install mezzanines, or maintain the minimalist charm.

2. Natural Light and Airiness

   The oversized windows characteristic of lofts bring in plenty of natural light, making the space feel bright and open. For those who appreciate a well-lit home, lofts are an excellent option.

3. Live-Work Possibilities

   Many lofts, particularly those in artist communities, offer the opportunity to combine work and living spaces. This makes them ideal for entrepreneurs, freelancers, and creatives who require open space for studios or offices.

4. Prime Urban Locations

   Loft conversions typically occur in industrial districts, which are now some of the trendiest urban areas. Whether in Manhattan’s SoHo or Hamilton’s downtown core, these locations provide proximity to cultural hotspots, dining, and entertainment.

Loft Markets in New York City and Hamilton

Manhattan: The Loft Capital

In Manhattan, true lofts make up about 10% of the co-op and condo market. Many of these are found in former manufacturing districts like SoHo, Tribeca, and Chelsea. Because they are relatively rare, they tend to command higher prices than conventional apartments. Some areas in Brooklyn, such as Williamsburg and Dumbo, have also become loft hotspots, offering slightly more affordable options.

Hamilton’s Core Lofts: A Canadian Alternative

Hamilton, Ontario, has emerged as an attractive alternative for loft buyers looking for affordability and unique spaces. Core Lofts at 66 Bay Street South is a prime example. Originally a communications building, this complex was converted into residential units in 2005, preserving industrial elements while incorporating modern comforts. A unit like #105, featuring two levels, polished concrete floors, and 20+ foot ceilings, offers an appealing mix of urban sophistication and historic charm.

Challenges of Loft Living

While lofts have undeniable appeal, they come with their own set of challenges that buyers should consider:

1. Heating and Cooling Costs

   Due to high ceilings and large windows, lofts can be costly to heat in the winter and cool in the summer. Energy efficiency can be a concern, especially in older buildings with outdated insulation.

2. Lack of Defined Spaces

   The open concept of lofts is a double-edged sword. While it provides flexibility, it can also make privacy a challenge. Creating designated areas for bedrooms, workspaces, and living areas may require creative solutions like partitions or furniture placement.

3. Maintenance of Older Buildings

   Many true lofts are located in historic buildings that may have maintenance issues such as drafty windows, outdated plumbing, or structural concerns. Prospective buyers should carefully inspect a loft’s infrastructure before purchasing.

4. Zoning and Legal Considerations

   Some lofts were not originally intended for residential use, leading to zoning or certificate of occupancy complications. It’s essential to confirm that the unit complies with local residential codes.

Buying a Loft: Key Considerations

If you’re set on purchasing a loft, here are a few critical factors to keep in mind:

• Check the Building’s History: Research whether the building was converted for residential use and whether there have been any legal or structural issues.

• Evaluate the Amenities: Some loft buildings offer modern amenities like fitness centers and rooftop terraces, while others may have minimal services.

• Understand the Maintenance Fees: Lofts in older buildings may have higher maintenance costs due to their history and structure.

• Consider Your Lifestyle: Loft living is best suited for those who appreciate open spaces and urban aesthetics. If privacy and traditional layouts are priorities, a loft may not be the best fit.

Is a Loft Right for You?

Lofts offer a unique blend of history, character, and modern urban living. Whether in the heart of Manhattan or an up-and-coming city like Hamilton, they provide an opportunity to create a customized, spacious home. However, potential buyers should carefully weigh the pros and cons, ensuring the space fits their lifestyle and budget.

For those who appreciate high ceilings, expansive windows, and industrial charm, loft living can be a dream come true. But like any home purchase, due diligence is key. By understanding the market, considering potential challenges, and evaluating personal preferences, buyers can make an informed decision and find a loft that truly feels like home.

Canada’s New Prime Minister, Interest Rate Cuts, and the State of the Housing Market

Canada has a new prime minister, and with that comes significant economic and policy implications. Mark Carney, a former central banker, has taken the helm without a general election, leading to discussions about his policies and what they mean for the country. Additionally, the Bank of Canada has introduced more interest rate cuts, which will impact mortgage rates, homeownership, and the rental market. This blog delves into these crucial topics and what they mean for Canadians.

Mark Carney as Canada’s New Prime Minister

Mark Carney, a well-known figure in the global financial community, has stepped in as Canada’s new prime minister. Having previously served as the Governor of the Bank of Canada and later as the Governor of the Bank of England, Carney brings a wealth of experience. However, his transition from central banker to politician has raised concerns among many Canadians, as he was not elected in a general election but rather installed by members of the Liberal Party.

Carney’s policy inclinations have sparked debate, particularly regarding the energy sector. He is a strong advocate for Net Zero policies and the Environmental, Social, and Governance (ESG) movement. His past involvement in the Net Zero Banking Alliance, which sought to redirect financing away from fossil fuels toward renewable energy, has led some to question whether he will support Canada’s resource-driven economy. Given Canada’s wealth of natural resources, including oil, gas, and minerals, policies that restrict their development could have significant economic consequences.

Potential Implications for the Housing Market

One of the most pressing questions surrounding Carney’s leadership is his approach to housing. During a recent panel discussion, Bob Rennie, a key player in Vancouver’s real estate sector, revealed that he has been working with Carney on a proposal aimed at revitalizing the rental market. The plan suggests allowing foreign buyers to purchase Canadian properties under the condition that they commit to renting them out for 25 years. Additionally, it proposes using the Canada Mortgage and Housing Corporation (CMHC) to provide subsidized loans to these foreign investors.

Reopening the Market to Foreign Buyers

Currently, Canada has a foreign buyer ban in place, implemented in 2023 under Prime Minister Justin Trudeau in response to concerns about affordability. However, many argue that foreign capital still finds its way into the market through Canadian permanent residents or family members. By officially reopening the market to foreign investors and offering them preferential financing, the government hopes to stimulate housing construction. The catch is that these properties must remain rental units for a quarter-century.

While some developers see this as a necessary move to revive the pre-construction condo market, others worry that it could inflate property prices and divert taxpayer-subsidized financing to non-Canadians. The debate over whether this policy will help or hurt affordability continues.

The Pre-Construction Condo Market Crisis

A major concern in the housing sector is the collapse of the pre-construction condominium market. Developers are struggling to sell units due to high interest rates, declining rents, and an overall pullback from investors. As a result, many projects have been delayed or canceled, leading to a projected shortage of housing supply in the coming years.

Rising construction costs, coupled with a lack of investor confidence, have exacerbated the issue. If developers cannot meet their pre-sale requirements, they cannot secure financing to build. This could result in a severe housing supply crunch in the next five to seven years, contradicting the government’s goal of increasing housing availability.

Bank of Canada’s Interest Rate Cuts

In response to economic uncertainty and a weakening housing market, the Bank of Canada has continued cutting interest rates. This week, the central bank announced a 25-basis-point reduction, bringing the policy rate down from its peak of 5% to 2.75%. Some analysts predict that rates could drop to 2% by the end of the year, providing relief to borrowers.

Impact on Mortgage Rates

With rates falling, variable-rate mortgages are becoming more attractive again. As of now, the average variable mortgage rate sits around 4.25%, aligning with many fixed-rate options. Some borrowers can secure three- or five-year fixed mortgages at rates as low as 3.99%.

However, deciding between a fixed or variable mortgage remains a challenge. While variable rates could drop further if the Bank of Canada continues its cuts, global economic volatility—especially with ongoing trade tensions—makes fixed rates a safer bet for those seeking stability. Borrowers must consider their risk tolerance, job security, and cash reserves before making a decision.

Rising Inventory and Declining Rents

Another major development in the real estate market is the increasing inventory of unsold properties. In both Vancouver and Toronto, unsold pre-construction units have reached record highs. Meanwhile, the resale market is experiencing an influx of new listings, further increasing supply.

Adding to the challenges, rental rates are beginning to decline. According to Rentals.ca, the national average rent has fallen by 5% year-over-year, with larger drops in key metropolitan areas. In Vancouver, for example, rents have declined by 7-10% from their peak levels. This shift is particularly concerning for investors who purchased pre-construction units at high prices, expecting rents to remain strong. Now, many are facing negative cash flow, leading to distress sales and further price declines.

The Looming Issue of Pre-Sale Closings

A growing issue in the condo market is the wave of pre-sale closings that are now occurring at valuations lower than their original purchase prices. Many buyers who secured pre-construction units years ago at higher prices are now struggling to close due to a combination of declining values and higher borrowing costs. In some cases, buyers are finding that their unit’s current market value is 5-10% lower than what they originally paid, making it difficult to secure the necessary financing.

On top of this, closing costs such as GST, property transfer taxes, and realtor fees add another layer of financial strain. Many investors who intended to flip their units for a profit are now facing six-figure losses, further dampening sentiment in the pre-construction market.

Final Thoughts: What Lies Ahead?

The combination of a new prime minister, an uncertain economic outlook, and shifting housing policies makes this a pivotal moment for Canada. While Carney’s background as a central banker suggests a deep understanding of economic fundamentals, his commitment to climate policies and government intervention in housing raises concerns among many stakeholders.

The proposed plan to reopen the market to foreign buyers with CMHC-backed financing is controversial, as it could either revitalize housing construction or exacerbate affordability issues. Meanwhile, interest rate cuts may provide temporary relief to homeowners, but they won’t solve the fundamental supply and demand issues in the housing sector.

The coming months will be critical in shaping Canada’s economic trajectory. With ongoing trade tensions, fluctuating interest rates, and an evolving housing crisis, policymakers will need to strike a careful balance to ensure stability and growth. Canadians should stay informed and prepared for further shifts in the market.

Economic uncertainty is currently gripping Canada and the United States, particularly within the real estate sector. Investors and homebuyers who are making million-dollar or multi-million-dollar transactions require stability and certainty. However, with policy shifts and unpredictable economic events, the real estate market is experiencing significant turbulence. Every time there is a shift in government policy or economic conditions, the market tends to freeze.

If we examine the latest data from Vancouver and Toronto, the two largest real estate markets in Canada, we see a sharp decline in housing activity, particularly on the sales side. Vancouver home sales have declined by 11% year over year. While this might not seem drastic at first glance, zooming out reveals a concerning trend. February 2024 was one of the slowest months for sales in the last 25 years, trailing only behind 2019, 2013, and 2009. Inventory is beginning to build, but primarily in specific sectors—most notably, the condo market.

A Surge in Condo Listings and Investor Sell-Offs

New listings hit record highs in January and February, particularly in the condo market. Many investors are exiting due to years of negative cash flow, high mortgage rates, and softening rental conditions. Vacancies are increasing, and units are taking longer to rent, leading many investors to cut their losses. However, as they attempt to sell, they face an illiquid market due to an inventory surge.

Suburban markets are witnessing significant shifts as well. Since 2015, suburban condo prices in Greater Vancouver, particularly in the Fraser Valley, have doubled. The pandemic fueled demand as remote work became more common, pushing buyers further from city centers. However, as interest rates increased, these local end-user markets—often more sensitive to financial fluctuations—are seeing inventory pile up. Standing inventory in the Fraser Valley’s condo market is now at an all-time high. Historically, when inventory surges to such levels, prices tend to fall.

The Greater Toronto Area (GTA) is experiencing similar issues. Seasonally adjusted home sales declined by 28% on a month-over-month basis, marking the steepest drop since the pandemic and the global financial crisis. The condo segment, particularly among investors, is facing the most challenges. Pre-construction condo sales in 2024 hit a 30-year low. If developers cannot pre-sell units, they simply do not build, leading to a sharp drop in future housing supply.

Government Intervention and Pre-Construction Market Struggles

The British Columbia government recently extended the pre-construction sales period from 12 months to 18 months to allow developers more time to secure financing. This policy shift acknowledges the challenges in the pre-construction market, where projects are struggling to get off the ground. A similar trend is emerging in the GTA, where developers are also struggling to sell pre-construction units, further impacting future housing supply.

Despite the slowing construction market, the federal government is fast-tracking 6,000 undocumented construction workers. This move is ill-timed, as housing starts are already declining rapidly. The demand for construction workers was high during the peak of the market in 2020-2022, but with housing starts now plummeting, the industry will soon face an oversupply of labor. Many construction workers may struggle to find work as current projects wrap up and fewer new developments begin.

Tax Policies and Housing Market Challenges

In an effort to address budget deficits, the British Columbia government has increased the speculation and vacancy tax from 2% to 3% for foreign owners and from 0.5% to 1% for Canadian residents. This tax primarily affects secondary homeowners who use properties as vacation homes. The unintended consequence is that these taxes may discourage investment in housing markets where additional supply is already limited.

Adding to the complexity, the BC government has mandated multiplex housing across the province to increase density. However, utility companies, particularly BC Hydro, are struggling to meet the demand for new developments. Multiplex units require significant electrical infrastructure, including large transformers (PMTs), which take about 12 months for approval. Developers face high holding costs due to these delays, reducing the feasibility of these projects. If natural gas heating were permitted, many of these delays could be avoided, but current policies mandate electric-only heating, further complicating new developments.

The Road Ahead for Real Estate

The Canadian real estate market is at a critical juncture. Uncertainty surrounding economic policies, interest rates, and government intervention is creating an environment where investors and homebuyers are hesitant to act. The data suggests that condo markets, particularly in suburban areas, are at the highest risk of price declines due to rising inventory and decreasing demand. Meanwhile, pre-construction markets are stagnating, which will impact housing supply in the coming years.

Policymakers must carefully consider the timing and implications of their decisions. Fast-tracking construction workers during a market downturn, increasing taxes on secondary homes, and imposing rigid development regulations could exacerbate the current slowdown. Market participants must navigate these challenges with caution, keeping an eye on economic trends and policy changes that could impact their investments.

As the situation continues to evolve, it is essential to monitor housing activity, interest rate trends, and government policies. The coming months will be critical in determining whether the market stabilizes or if further turbulence lies ahead. Investors and homebuyers should prepare for continued uncertainty and make informed decisions based on the latest market data.