How to Get the Best Mortgage Rates Cambridge in 2018
Searching for the best mortgage rates Cambridge? In 2018, finding the best mortgage rate online isn’t as simple as it was even just a few years back. The answers definitely can’t be found on a simple ‘rate comparison site’. Due to massive government regulation, the Cambridge mortgage rates that mortgage brokers and banks are able to offer will differ greatly depending on your mortgage application type.
For example, did you know that:
- The best mortgage rates are often available to those with the lowest down payments?
- Mortgage renewal rates can be drastically lower than mortgage refinance rates?
- Down payments of 20% can often receive the highest rates?
- Mortgage brokers have the ability to lower rates further than you may think – some brokers do this while others don’t.
The aim of this article is to show you how rate differences work so that you can have a good understanding of what to expect. You’ll get the information you need to save the most on mortgage interest, in the simplest, smartest ways possible. You’ll gain the confidence to make the right decision.
The type of mortgage rates in Cambridge that you’ll discover are generally broken down into 2 categories:
- Purchase and Renewal mortgage rates
- Mortgage refinance rates
Property Purchase and Renewal mortgage rates
On a home purchase or mortgage renewal, this is where the absolute lowest mortgage rates in Cambridge can be found. Why? Because the Canadian Federal government did not limit the funds available to Banks and other lenders for these mortgage purposes. So with more supply of mortgage funds available and more competition among lenders, rates can be found at their lowest.
With this said, there are differences between mortgage rates for a home purchase depending on how much down payment is available. For example:
Less than 20% down payment: With CMHC (Canada Mortgage and Housing Corporation) insured mortgages, the lenders carry the least amount of risk because the CMHC pays out the mortgage in the unfortunate event of a foreclosure. Although most Cambridge mortgage shoppers will never default, this CMHC feature does make a difference in their rate. CMHC fees are included in the mortgage, and not paid upfront by the borrower.
Mortgages with 20 – 24.99% down payment: At this down payment range, the lender will not require CMHC insurance. Great. This will end up saving you more than if the mortgage was insured, with a lower rate. With this said, 20% is the minimum down payment that can be made to avoid CMHC, and presents the lender maximum exposure to risk. The mortgage rates are therefore priced slightly higher because of this.
Mortgages with 25% + down payment: Even though the lenders are not insured against default in this case, they deem 25% or more down payment to be a nicer cushion that reduces their risk. Therefore they are able to price mortgage rates back at the lower range.
The bottom line is – less risk for the lender means a lower rate for you, the mortgage shopper. If you were an investor, what mortgage would you rather invest in? A mortgage backed by 20% equity, or a mortgage back by 35% equity? There inlies the reasons for these differences.
What about mortgage renewals?
In 2018, if you’ve owned your home in Cambridge for the past 3-5 years, you likely have approximately 35% equity built up in your home, because of how much housing prices have increased. Along with CMHC insured mortgages, this is where the best mortgage rates in Cambridge are available because there is little risk to the lender. Thus, most mortgage renewals can be done at extremely low rates – often up to 1% lower than can be found through a Banks renewal offer.
Mortgage Refinance Rates Cambridge
The main difference between a mortgage renewal and a refinance is that a refinance can allow the homeowner to remove equity from the home in order to pay off debts, make renovations – and a whole host of other purposes. Because the Canadian Government tightened rules surrounding refinance lending, there is less money available and therefore the mortgage rates are slightly higher.
For example, the lowest rates in Cambridge might be 2.99% for a renewal. However, the rate for a refinance might be 3.49%. So why would a homeowner want to opt for the higher rate? Quite simply because if there are several thousand dollars in credit card debt, then the extra interest paid on the mortgage can easily be justified by the high rates found with credit cards. Maybe the money is to be used for investment instead? If the return on investment might be 10% per year, then again, the .50% difference in rate is likely justified in this case.
There are dozens of instances where it can make sense to pay more for a refinance, however by choosing a great Cambridge broker, you can rest assured that you will always obtain the best rate no matter what your situation.
How a Cambridge Mortgage Broker can provide you the absolute best mortgage rate
Once your mortgage type is determined, in order to achieve your best mortgage rates Cambridge, the right lender must be selected and the broker must be willing to accept less commission payment from the lender, for the lender to offer you their best rate.
So two things there (1) The right lender (2) Broker sacrificed commission
If the broker is not picking the absolute best rate lender for your situation, and is not prepared to accept a lower commission payment, then your rate will be higher. We always ensure that you are offered the best of both of these categories. It ain’t rocket since, and we find that transparency and truth builds trust incredibly well, and incredibly fast. It’s refreshing to obtain the best mortgage rate the first time you ask, with no haggling or games.
Have questions? Connect with us for a personalized approach you getting your best possible Cambridge mortgage rates!
