Comparing Mortgage Lenders in Canada
Top 5 Big
Bank Rates
The top 5 Big Bank rates all in one easy-to-view table. See their rates, then beat their rates (or get $500) with nesto’s low rate guarantee.
*Toronto rates
nesto’s lowest vs Big Bank insured mortgage rates
Results
For today, {date}, nesto’s {term}-year {type} mortgage rate is {bps} bps ({bps_percent}) lower than the similar average at Canada’s Big 6 Banks. On a {mortgage_ammount} mortgage over a {amortization_period}-year amortization, with nesto your monthly payment would be {nesto_monthly_payment}, saving you up to {monthly_savings} on your monthly payment. This equals {savings_interest} in interest saved while allowing you to pay down {extra_payment} extra on principal over your term.
Average Posted Mortgage
Rate History
Let’s time travel. Below is the history of posted mortgage rates and where they’ve stood over the years.
| Year | Mortgage 5 Year | Mortgage 3 Year | Mortgage 1 Year | Prime Rate |
|---|---|---|---|---|
| 2023 | 6.49% | 6.54% | 7.14% | 7.20% |
| 2022 | 5.24% | 5.39% | 5.44% | 7.20% |
| 2021 | 4.79% | 3.49% | 2.79% | 2.45% |
| 2020 | 4.94% | 3.89% | 3.19% | 2.45% |
| 2019 | 5.34% | 4.29% | 3.64% | 3.95% |
| 2018 | 5.34% | 4.29% | 3.49% | 3.95% |
| 2017 | 4.64% | 3.39% | 3.14% | 3.20% |
| 2016 | 4.64% | 3.39% | 3.14% | 2.70% |
| 2015 | 4.64% | 3.39% | 2.89% | 2.70% |
| 2014 | 4.79% | 3.75% | 3.14% | 3.00% |
| 2013 | 5.24% | 3.73% | 3.14% | 3.00% |
| 2012 | 5.24% | 3.95% | 3.20% | 3.00% |
| 2011 | 5.39% | 4.35% | 3.50% | 3.00% |
| 2010 | 5.42% | 4.15% | 3.55% | 3.00% |
| 2009 | 5.79% | 4.45% | 3.80% | 2.25% |
| 2008 | 7.15% | 7.00% | 6.95% | 3.50% |
| 2007 | 7.19% | 7.30% | 7.05% | 6.00% |
Canada’s mortgage market has seen a surge in the number of lenders offering various mortgage products. From traditional banks to credit unions, mortgage finance companies, monoline and online lenders, potential homeowners have many options. However, given the vast array of choices, finding the right lender can require a lot of homework. This Canadian mortgage lenders guide has been designed to help you find the best mortgage lenders who offer the most suitable mortgage solution for your needs.
What is a Mortgage Lender?
A mortgage lender is a financial institution, mortgage company or mortgage corporation that extends credit as mortgage loans to individuals and businesses to purchase real estate. These institutions lend money to borrowers, who then use the funds to buy a property. The property is collateral against the loan, ensuring the lender can recoup their money should the borrower default on their payments.
A Lenders
A lenders, are characterized by their stringent lending policies. They have strict requirements for borrowers’ credit scores, income, and debt levels. While the terms and rates from A lenders can be attractive, not all borrowers will meet their high standards. Sometimes, A lenders may offer a suite of financial products and services beyond personal loans and mortgages. An A lender will offer customized pricing on their lender mortgage rates based on the borrower’s relationship with the lender and may offer alternative financing and lending options for private and corporate clients. Although all A lenders may be interchangeably known as prime lenders, the reverse is only sometimes true.
B Lenders
B lenders, alternative or subprime lenders, offer more flexibility in their lending policies. Subprime lenders are often the go-to option for those who cannot meet A lenders’ strict requirements. Their prospective clients may include individuals with lower credit scores, high debt levels, or unconventional income sources. Some A lenders may offer non-income qualified (NIQ) products, which are technically non-prime lending to their private banking, corporate, or commercial clients.
Private Lenders
Private lenders offering mortgages are an alternative form of financing provided by private individuals, a group of investors or companies. They are often used as a last resort by borrowers who may have been rejected by both A and B lenders. Private lenders are often the go-to for borrowers who qualify for an A lender but require exceptional creativity, speed to funding, or special consideration for their property type/project. While private mortgage loans can provide quick access to funds, they usually come with higher interest rates and fees due to the increased risk involved.
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How to Choose a Mortgage Lender
Choosing a mortgage lender involves considering several factors beyond the interest rate. Here are some key aspects to consider:
- Interest Rates: Compare the interest rates offered by different lenders. Remember, the lowest rate may only sometimes be the best option if it comes with unfavourable terms.
- Fees: Be aware of any additional fees the lender might charge. Though only sometimes optional, additional fees could include application fees, appraisal fees, and closing costs.
- Customer Service: Consider the lender’s reputation for customer service. This could include their response time, availability, and willingness to answer your questions.
- Loan Terms: Look at the terms of the loan, including the length of the loan, the type of interest rate (fixed or variable), and any penalties for early repayment (past your annual prepayment privileges).
- Flexibility: If you foresee needing some flexibility in your repayment plan, look for a lender that offers options such as double-up prepayments, match-a-payment, miss-a-payment, deferred payments, capitalization, longer early renewal period, blend and extend, mortgage porting, mortgage conversion or loan modification options.
Mortgage Lenders in Canada
Canadian mortgage providers offer a variety of mortgage solutions. We have illustrated some small but important details for each mortgage lender.
Comparing Lenders in Canada
| Lenders | About |
|---|---|
| nesto | Canada’s premier 100% digital monoline lender |
| First National Financial LP | Canada’s biggest non-bank mortgage lender |
| MCAP | Canada’s first mortgage finance company |
| Merix Financial | Canada’s first mortgage finance company to offer 40-year amortizations |
| RMG | Canadian Monoline residential mortgage lender |
| RFA | Canadian Monoline residential mortgage lender |
| Canwise (Ratehub) | Monoline residential mortgage lender operated by Ratehub. |
| Think Financial (True North) | Monoline residential mortgage lender operated by True North. |
| Pine | Canadian Monoline residential mortgage lender |
| QuestMortgage | Canadian monoline residential mortgage lender |
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nesto
nesto is a Canadian mortgage lender and brokerage that uses technology to provide competitive rates and a seamless borrowing experience. Backed by solid accreditations and an innovative approach, nesto offers a range of standard mortgage products to suit various needs.
Best for: borrowers seeking low rates on Canadian lender mortgages, with a streamlined online application process through direct-to-lender options.
Special rate offerings: nesto offers competitive insured and insurable rates typically 20% lower than those of the Big 6 Banks.
Rate terms offered: nesto provides a variety of term options.
Limitations: nesto currently only offers standard charge mortgage registrations on their mortgages, making it difficult to add a HELOC to your mortgage mix at nesto. However, this does keep costs down for themselves and their clients. standard charge mortgage registrations come with low discharge and transfer fees.
First National
First National Financial LP is a monoline lender that offers mortgage financing options for those who may not meet traditional banks’ stringent requirements.
Best for: Borrowers seeking flexibility and alternative financing options through the broker channel.
Special rate offerings: First National offers competitive rates and prides itself on retaining existing mortgage holders at renewal.
Rate terms offered: First National provides a variety of term options.
Limitations: HELOCs are not offered at First National’s prime lending channel, although secondary financing offered as a second mortgage may still be an option for well-qualified homeowners. Mortgages at First National are registered as standard charges with low discharge and transfer fees.
MCAP
MCAP is Canada’s largest mortgage finance company. It offers residential and commercial mortgage financing options for those who may or may not meet the stringent requirements at banks.
Best for: Borrowers seeking flexibility and alternative financing options through the broker channel.
Special rate offerings: MCAP offers competitive rates.
Rate terms offered: MCAP provides a variety of term options.
Limitations: MCAP’s Fusion collateral charge mortgage is underwritten by one of the Big 6 Banks, which prevents your broker from discussing a file directly with their broker relationship manager at MCAP.
Merix
Merix is a mortgage finance company. It offers residential and alternative mortgage financing options for those who may or may not meet the stringent requirements at banks. Merix offers alternative and subprime lending options through its subsidiaries, Lendwise and NPX.
Best for: Borrowers seeking flexibility and alternative financing options through the broker channel.
Special rate offerings: Merix offers competitive rates.
Rate terms offered: Merix provides a variety of term options.
Limitations: HELOCs are registered as second-position mortgages, which can be costly for the borrower if they need to discharge or refinance in the future. Mortgages at Merix are registered as standard charge mortgages, which come with low transfer fees.
RMG
RMG is a monoline lender that offers mortgage financing options for those who may not meet traditional banks’ stringent requirements.
Best for: Borrowers seeking flexibility with a la carte pricing through the broker channel.
Special rate offerings: RMG offers competitive rates and cashback products.
Rate terms offered: RMG provides a variety of term options.
Limitations: RMG does not offer HELOCs. Its mortgages are registered as only standard charge mortgages, which come with low discharge and transfer fees.
RFA
RFA recently bought Street Capital Bank of Canada and is now considered a deposit-taking monoline lender. It offers mortgage financing options for those who may or may not meet traditional banks’ stringent requirements.
Best for: Borrowers seeking flexibility through the broker channel.
Special rate offerings: RFA offers competitive rates and cashback products.
Rate terms offered: RFA provides a variety of term options.
Limitations: HELOCs are not offered at RFA. Their mortgages are registered as only standard charges, with low discharge and transfer fees.
Canwise
Canwise is Ratehub’s arm’s length monoline lender. It offers mortgage financing options for those who may or may not meet traditional banks’ stringent requirements.
Best for: Borrowers seeking flexibility through the direct-to-lender option.
Special rate offerings: Canwise offers competitive rates.
Rate terms offered: Canwise provides a variety of term options.
Limitations: Canwise does not offer HELOCs. Its mortgages are registered as only standard charge mortgages, which come with low discharge and transfer fees.
Think Financial
Think Financial is True North Mortgages’ arm’s length monoline lender. It offers mortgage financing options for those who may or may not meet traditional banks’ stringent requirements.
Best for: Borrowers seeking flexibility through the direct-to-lender option.
Special rate offerings: Think Financial offers competitive rates.
Rate terms offered: Think Financial provides a variety of term options.
Limitations: HELOCs are not offered at Think Financial. Their mortgages are registered as only standard charges, with low discharge and transfer fees.
Pine
Pine started as a brokerage using CMLS to fund mortgages; now, funding mortgages under its name falls under the monoline lenders category. It offers mortgage financing options for those who may or may not meet the stringent requirements of traditional banks. Currently, it’s limited to funding mortgages in BC, Alberta, and Ontario.
Best for: Borrowers seeking flexibility through the direct-to-lender option.
Special rate offerings: Pine offers competitive insured and insurable mortgage rates.
Rate terms offered: Pine provides a variety of term options.
Limitations: Pine does not offer HELOCs. Its mortgages are registered as only standard charge mortgages, which come with low discharge and transfer fees.
QuestMortgage
QuestMortgage is a full-service mortgage lender that provides solutions throughout Canada, excluding Québec and the territories. It provides its mortgage lending services through Community Trust Company.
Best for: borrowers seeking flexibility on prime residential lending.
Special rate offerings: transparent rates as advertised on the website.
Rate terms offered: QuestMortgage provides residential prime lending options for Canadians.
Limitations: QuestMortgage does not offer HELOCs. Its mortgages are registered as only standard charge mortgages, which come with low discharge and transfer fees.
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Are you a first-time buyer?
Frequently Asked Questions
What does a mortgage lender do?
A mortgage lender loans the funds for a borrower to purchase a property. The property itself serves as collateral for the loan. The borrower then pays back the loan, with interest, over a set period.
How can I find a local mortgage lender in my neighbourhood?
The easiest way to find a local lender is to search online or ask for recommendations from friends or family. Consider working with the best mortgage brokers who can help you find suitable lenders in your area.
What is the between lenders and banks?
The main difference lies in the services they offer and their lending criteria. Banks are deposit-taking financial institutions that provide a wide range of products, including investments, guaranteed deposits, chequing and savings accounts, credit cards, lines of credit, mortgages, self-directed investments and loans. Banks typically have more stringent lending criteria. On the other hand, lenders primarily focus on credit and lending, such as mortgages and loans, and may have more flexible lending criteria.
What is prime lending?
Prime lending refers to mortgage rates priced using the Bank of Canada prime rate. Although fixed mortgage rates are independent of the central bank’s prime rate, they are directly linked to Government of Canada bonds, priced using the expectations and fluctuation in prime rates.
What is a monoline lender?
A monoline lender only provides mortgage financing, which is its sole business. It may also service its mortgage loans or purchase a portfolio of mortgages from another lender to service those loans.
What is a mortgage investment corporation (MIC)?
A mortgage investment corporation (MIC) is a pooled investment fund specializing in private mortgage lending. MICs are an asset class comprising corporate or individual investors who pool their money to lend out to individual borrowers in the form of syndicated mortgages.
What is a mortgage finance company (MFC)?
A mortgage finance company primarily aims to provide or service mortgage loans. It is a monoline lender solely providing mortgage loans to individuals. In addition, Canadian mortgage finance companies may purchase mortgages from another mortgage lender to service the mortgage loan. MFCs are non-deposit-taking financial institutions with cooperative and competitive relationships with chartered banks. They typically work through licensed brokers and provide access to prime and alternative lending solutions.
What is a mortgage company?
Mortgage companies in Canada primarily aim to provide or service mortgage loans. They may be a variety of provincial lenders, federal lenders, credit unions, or registered private lending syndicates. In addition, Canadian mortgage companies may purchase mortgages from the original mortgage lender to service the mortgage loan.
What is a mortgage trust?
A mortgage trust can be a variety of mortgage products and service providers. A mortgage trust may also be a lender’s subsidiary providing mortgage loans. In addition, Canadian mortgage trusts can buy or sell mortgages, repackaging mortgages to reissue them as pooled investments.
What is a mortgage investment entity (MIE)?
A mortgage investment entity can be a mortgage pool or investment corporation. These entities typically pool Canadian diversified residential mortgages to repackage them as investments. The interest they receive from borrowers is paid out to unitholders as dividends, creating a tax advantage for Canadians who hold them.
What is an NHA-approved lender?
An NHA-approved lender refers to a lending institution designated as an approved lender by the Canada Mortgage and Housing Corporation (CMHC) under the National Housing Act (NHA). Only NHA-approved lenders may qualify for CMHC mortgage default loan Insurance. These institutions are approved to lend, underwrite, and administer CMHC-insured housing loans.
What is a mortgage syndicate?
A mortgage syndicate, also known as a syndicated mortgage, is a form of real estate secured lending (RESL) that involves multiple lenders, usually as separate or a group of individuals. In this type of mortgage, the risk is shared among the lenders, each exposed to risk proportional to their ownership.
What is a real estate investment trust (REIT)?
A real estate investment trust (REIT) is a company that owns a pool of residential, commercial or industrial income-generating real estate. They are publicly traded companies or private investments that allow you to invest in real estate without needing to manage properties. They pass their net income from collected rents as dividends to their unitholders, which is tax advantageous for the Canadian investor.
Why Choose nesto
At nesto, our commission-free mortgage experts, certified in multiple provinces, provide exceptional advice and service that exceeds industry standards. Our mortgage experts are non-commissioned salaried employees who provide impartial guidance on mortgage options tailored to your needs and are evaluated based on client satisfaction and advice quality. nesto aims to transform the mortgage industry by providing honest advice and competitive rates using a 100% fully digital, transparent, seamless process.
nesto is on a mission to offer a positive, empowering and transparent property financing experience – simplified from start to finish.
Contact our licensed and knowledgeable mortgage experts to find your best mortgage rate in Canada.