• Why is my mortgage rate higher than expected?

    The mortgage rates that you expect and that you see advertised online may not be the same rates that you will realize when you get a mortgage. Why is this?

    Here is how you get ideal rates:

    • You are purchasing a home in a desirable area
    • You will be living in the home that you are purchasing
    • You are putting 35% down or less than 20% down
    • You are amortizing the mortgage over 25 years
    • You have excellent credit
    • You have excellent income and relatively few other debts

    When you start to wander away from these criteria, then the rate starts to increase. 

    Here are some examples of why the rate may be higher than expected:

    • You are purchasing a home in a small remote town
    • The home will be fully rented or even worse, a student rental
    • You are putting 20% down (but please note, the rate advantage of putting less than 20% down will likely not offset the cost of CMHC insurance so you are better off putting 20% down and paying a slightly higher rate)
    •  You are amortizing the mortgage over 30 years or more, this usually entails a premium on the rate
    • You have bad credit
    • Your income does not pass the stress test
    • You are carrying too much other debt

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