Compare The Best Mortgage Rates In Vancouver

Your Guide To Getting The Best Mortgage Rates In Vancouver

Of all the cities in Canada, The City of Vancouver ranks as one with the highest home price average in Canada, and as a result, the down payment requirements are the biggest. The root cause of this lies in the $1 million federal cap on insured mortgages, which leads to a good number of high-priced homes in Vancouver being non-insurable. The city also has a significant foreign home buyer segment that tends to make down payments way above average. But don’t give up on your quest to get the best mortgage rates in Vancouver, your one-stop shop remains comparemortgages.ca. We scan the market and provide you the best rate, upfront, in minutes.

About Vancouver

Vancouver ranks as the largest city in British Columbia, and the Greater Vancouver Area is third on the list of the country’s largest metropolitan regions. No other city in Canada has a bigger population density than Vancouver, with 5,249 people per square kilometer and over half the population being fluent in another language apart from English. 

Vancouver still appears on the list of the most livable cities in the world, mainly due to its splendid synchronization with the surrounding landscape. Therefore, it is no surprise that Vancouver’s tourism industry ranks second on the list of the biggest contributors to the city’s economy. 

Compare Vancouver Mortgage Rates

Below is a table displaying the best rates from the five largest banks in the country. You can easily compare the rates offered by major Canadian lenders and banks, including TD Bank, RBC, CIBC, HSBC, and Scotiabank. We take care of the research to guarantee you the lowest possible rates upfront every time.

Compare Big Bank Rates In Vancouver

It can be time-consuming and frustrating to compare rates by yourself. With us, you can find everything you need in one convenient location. Also, ensure that you consider the mortgage product term length and type when comparing rates. For instance, if you are in the market for a fixed-rate mortgage, it is essential to examine the range of terms given by various banks, such as three-year and five-year offerings, and not just the interest rate.

About the Vancouver Housing Market

Vancouver presently has an average MLS home price value of $1,477,226, making it the most expensive city to buy a home in Canada. This indicates that Vancouver’s housing market is booming. Additionally, according to Capital on Tap, the city ranks as the third most expensive to buy a home in the world. 

Presently, Vancouver faces the development of a major gap between home values and residents’ income. To prevent homebuyers from taking on outrageous levels of debt, the Stress Test was introduced in 2018 by Canadian banking regulators. This led to a reduction in buying power and impacted what first-time homebuyers could afford to buy. In 2021, new rules went into effect making homebuying even more strenuous and increasing the qualifying rate for these homebuyers. 

Vancouver Closing Costs

Any home purchase has a measure of legal risks attached. As a result, you, the seller, and your lender would sign certain documents when finalizing the purchase. 

Some of these documents would contain information about the funds you borrow to purchase the home. When the seller accepts your offer, your real estate agent will set a closing date. On the said day, there would be a meeting with your agent and the mortgage lender’s representative, where you would sign a pile of documents. 

Home transfer from the seller to you, the buyer, would also involve certain costs. The biggest portion of these payments would be your down payment, which adds on as part of your principal for the home you’re purchasing. The lender would typically require a 5% to 20% down payment of the purchase price. With Vancouver’s house prices continuously rising, 5% can be a very sizable sum. However, you should note that if you don’t make a minimum downpayment of 20%, you must pay mortgage insurance, which tacks on about 2.8% to 4% of your total mortgage amount. 

When closing on the transaction, you would incur extra costs apart from your down payment. You would also need to move funds to either the closing attorney or the escrow company to cover closing costs. You would typically see variations in these closing costs based on the price tag of your new home. 

Type of costRate rangesEstimated cost (based on $500,000 home)
Realtor commissions*3%-7% of purchase price$15,000-$35,000
Home inspection feeFlat rate$300-$500
Property transfer tax1% for first $200,000; 2% on remaining amount up to $2 million$8,000
Legal feesFlat rate$1,000-$1,500

*Realtor commissions are usually paid by seller

Before closing, lenders would typically order an appraisal. This is to confirm that the amount you are borrowing aligns with the market value, and this measure helps them protect their investment. The appraisal would typically cost around $250-$350; however, since the lender would cover this fee, you get to save some. If your lender doesn’t order an appraisal, it is still an excellent idea to go ahead and get one done by yourself to protect your investment. 

Vancouver first-time homebuyer rebates

Buying a new home in Vancouver costs a pretty penny. However, you might not have to saddle all the financial burdens alone. Whether or not this is your first home purchase, certain programs help out with offsetting the initial costs. Review these three programs to see which fits your circumstances: 

  • RRSP Home Buyer’s Plan: if you participate in a registered retirement savings plan, you may be eligible to withdraw funds from the plan to offset some of your costs. Although the limit is $35,000, this could definitely help with initial fees 
  • First-Time Home Buyer’s Tax Credit: this tax credit would cover some costs if you nor your partner have neither owned a home this year or in the previous four years. You can claim up to a $5,000 tax credit on the return that covers the tax year in which you closed on the house 
  • GST/HST: Vancouver residents, just like other Canadians, pay goods and service tax on property owned including homes. In spite of the fact that British Columbia tax is one of the lowest, a 5% tax on a huge purchase could be really significant. This is why people who have only recently purchased a renovated or newly built home may qualify for a tax rebate. 

Vancouver Mortgage Brokers

If you are looking to invest in Vancouver, it is essential to reach out to a professional such as one of the best mortgage brokers in Vancouver who would be proficient at helping you navigate Vancouver mortgage rates. Schedule a call with us right away, we are always available to help.

What Affects My Mortgage Rate in Vancouver?

The interest rate on your mortgage would be influenced by certain factors that are already in place. Some of these factors are pretty general and impact the Vancouver market, certain others are specific to you and your finances, and there are yet some that are linked to the type of home you want to purchase. Here’s a look at the top factors influencing your mortgage rate in Vancouver: 

Down Payment

Your down payment determines whether you will have to pay mortgage default insurance alongside your recurring mortgage payments. If you make a down payment of less than 20% of the property’s value, you must pay mortgage default insurance.

Amortization Period

Suppose you opt for an amortization period (mortgages with less than 20% down payment have a maximum period of 25 years, while mortgages with down payments of 20% or higher have a maximum period of 30 years). 

In that case, you pay a lower amount as a mortgage since it is spread out for a longer period. A more extended amortization period features higher interest rates as well. Generally, the longer you take while paying off your mortgage, the more interest you will have to pay.

Property Usage

A primary residence, or an owner-occupied home, is one that you plan on living in and qualifies for the most desirable mortgage rates due to the lender’s assumption that you will prioritize payments on this property over any other investments. On the other hand, if you are looking to buy as an investment and turn it into a rental property, interest rates may be higher because of a greater perceived risk by lenders.

Mortgage Type

Your choice of open vs. closed or variable vs. fixed rates would also impact your mortgage rate. The choice of either option is personal and usually dependent on several factors.

For instance, for open vs. closed mortgages, open mortgages feature higher mortgage rates in Newfoundland due to the flexibility that borrowers enjoy since they can choose to pay off their mortgage anytime without penalty. Similarly, thanks to the certainty that fixed mortgages offer, your payments are fixed, and some people may opt for this even though variable mortgages like the 5-year variable rate are a better option in terms of cost-effectiveness.

Your Credit Score

Borrowers with a credit score of 680 and above are regarded as the ideal candidate for a traditional mortgage lender. Though ,the higher the score above 700 is – with a maximum score of 900, the better the chances of getting the best rates.

How to Apply for a Mortgage in Vancouver

When you have finally decided to buy a home, the next step is to explore loan options. Shopping around is important as it allows you to pick up as much information as possible about the mortgage rates available to you based on your credit score and the price of the house. Once you have concluded on the lender that you want to work with, you can begin to take the following steps: 

Meet with a mortgage expert

The first step after concluding on the lender you want to work with is to get pre-approved for the loan. This helps in several ways including helping you to find out exactly how much you can afford to spend on a home. When you have found a house and the seller has accepted your offer, you would already have the loan waiting for you to put it in place. You can proceed with your application online, however, a mortgage expert can also have a physical meeting with you to guide you through the process and provide answers to any queries. 

Acquire all necessary documents

Your lender is interested in seeing hard evidence that you can afford your monthly payments and this would be in the form of documentation. You would likely have to back up any income or debt statements you filled out earlier during the application process. You would likely need to upload pay stubs as well, or bank statements and tax records for the self-employed to show regular monthly debts. There is also a good chance that your lender would reach out multiple times before closing to ask questions or request extra documentation. 

Apply for mortgage financing

If you were preapproved, you should know that this milestone is only a preliminary aspect of the process. Although you might have provided documentation, you would still be required to fill out a more extensive application that mainly seeks to get details about your income sources and debts. This process should go smoothly if you got pre-approved. If you were not preapproved, this is the point where you could hit a stumbling block particularly if your debt-to-income ratio or credit score does not align with the necessary requirements for the loan amount you are looking to get. 

Sign & finalize your mortgage

The point where your home purchase ends is usually marked by something called a “closing.” This is where you would sign the necessary documents to put the home in your name and receive the funding to pay. This part of the process is the most intensive and can be pretty exciting too. Once the signing is done, you can very well move into your new home. 

Learn About Rates & Mortgages In Vancouver

If you’re looking to buy a home in Vancouver, you can save some by exploring or shopping around to get the best mortgage rates in Vancouver. We often get asked a number of questions by potential homebuyers all over Vancouver, and we have compiled these questions and the answers to them in our frequently asked questions section.

Why compare Vancouver mortgage rates with comparemortgages.ca?

Comparison shopping is the way to go to get the best possible price for any product or service. This is even more important in mortgages because you would be committing to the biggest financial decision of your life. We help you find the right rate.

Are Vancouver mortgage rates higher than other cities?

Vancouver is the most populous city in Canada, and the homebuying market is massive. However, this has led to an imbalance in recent years since demand has exceeded supply significantly. Of all Canadian cities, Vancouver presently has the lowest vacancy rate. This has caused home prices to rise, making getting a dream home in the price range that lenders offer a very difficult feat. 

Should I get a fixed-rate or variable-rate mortgage in Vancouver?

When a Vancouver homebuyer is pricing the current mortgage rates, there are two types of mortgages that they would typically be presented with. The first is a fixed-rate mortgage which remains the same through your initial mortgage term. Usually, a 5-year fixed mortgage implies that all your 60 monthly payments would be paid at an unwavering, fixed rate.  The second option is the variable-rate mortgage that, unlike the fixed mortgage, remains unchanging; this option varies from time to time. This is dependent on the market rate, so if there is an increase in interest rates during your five-year term, your payment increases alongside.