Find the Best Mortgage
Rates in British Columbia

Your Guide to Getting the Best Mortgage Rates in British Columbia

When you’re looking to find the very best mortgage rates in British Columbia, nesto is your one-stop shop. You can always rely on us to help you better understand how to navigate mortgages in any kind of market and provide the very best interest rate upfront.

About British Columbia

British Columbia – Canada’s westernmost province – is defined by its Pacific coastline and mountain ranges. Nature areas like Glacier National Park offer hiking and biking trails, as well as campgrounds. Whistler Blackcomb is a major ski resort that hosted the 2010 Winter Olympics. The scenic Sea-to-Sky Highway links Whistler with Vancouver.

Key facts about British Columbia:

• Vancouver is the fourth largest film and TV production hotspot in North America. If you’ve ever questioned if that was a famous Vancouver landmark you saw in a movie or in your favourite show, it most likely was
• Half the population of BC lives in the Metro Vancouver area. The city has a thriving food scene, mountain views and is surrounded by sparkling waters
• Osoyoos Lake is the warmest fresh water lake in Canada
• Khutzeymateen Provincial Park is Canada’s only Grizzly Bear sanctuary, home to more than 50 grizzlies across its 44,300 hectare grounds
• The cosmetic treatment known as Botox was pioneered in Vancouver in the late 1980s

Learn About Rates & Mortgages in British Columbia

Welcome to our Frequently-Asked Questions (FAQ) section, where we answer the most popular questions our nesto advisors receive on a daily basis across British Columbia, designed to help you make informed mortgage decisions every time you need a new mortgage or to renew/refinance an existing one.

About the British Columbia Housing Market

Throughout 2021 and into 2022, most regions of British Columbia have been considered hot markets thanks to a low level of active listings, a high number of property sales and an unprecedented increase in sale prices due mainly to bidding wars.

The BC Real Estate Association sees the provincial sales pace slowing, with a 15% decline in home transactions in 2022, compared to the record-setting pace of 2021.

The outlook from most analysts is similar to that of the Canadian Real Estate Association, which expects 2022 home sales to increase 8.6% compared to 2021, with prices rising 7.6%. Royal LePage, citing rising immigration, predicts that average house prices will increase 10.5% in 2022 while Re/Max Canada sees a 9.2% price increase.

First-Time Home Buyer Programs in British Columbia

There are several first-time home buyer incentives and programs available in British Columbia that were designed specifically to help lighten the financial burden for first-time home buyers. These programs will offset some home buying costs as well as help fund your down payment, which is often one of the biggest hurdles involved in buying your first home. See: First-Time Home Buyer Programs in Canada

What are the Different Types of Mortgages?

Open VS Closed Mortgage

With an open mortgage, you’re able to prepay any amount of your mortgage at any time without facing a prepayment penalty. The compromise for having an open mortgage is that interest rates are higher to make up for the flexibility of being able to pay it off at any time.

With a closed mortgage, on the other hand, the interest rate is more attractive than a closed mortgage because you’re limited by how much extra you can pay towards your mortgage each year. So, the compromise here is that you’ll face a prepayment limit. This means that you’re only permitted to pay a certain percentage of your original or current balance per year – often 15%, on average, but this varies between lenders. If you have the choice, be sure to always opt for the original balance prepayment option as it will enable you to pay off more in a year. And if you choose to pay more than your annual limit, you’ll receive a prepayment penalty. It’s important, therefore, to be aware of your limits and stay within them.

Fixed Mortgages

Fixed-rate mortgages make up 70% of all mortgages in Canada. A fixed-rate mortgage keeps your interest rate steady over the term of your mortgage (1-10 years). There’s no doubt that the five-year fixed-rate mortgage is the most common choice selected by Canadian homeowners. But, this isn’t the best option for everyone, regardless of its popularity. Fixed-rate mortgages appeal to homebuyers who are looking for a dependable payment schedule, manage a tight monthly budget or are generally more conservative. For instance, Millennials with large mortgages relative to their income may be better off opting for the peace of mind provided by a fixed rate and payments.

Variable interest rate mortgages

A variable interest rate can increase and decrease during your term. If you choose a variable interest rate, your rate may be lower than if you selected a fixed rate.

There are two types of variable mortgages: a) Variable rates with Fixed payments and b) Variable rates with Adjustable payments

Fixed payments with a variable interest rate

In general, under this option, the payment remains fixed over time despite variations of the interest rate.

If the interest rate goes up, more of your payment goes towards the interest, and less to the principal.

If the interest rate goes down, more of your payment goes towards to the principal. This means, you pay off your mortgage faster.

That being said, if the market interest rates increase to a certain percentage or trigger point, your lender may increase your payments. This payment increase will make sure that you pay off your mortgage by the end of the amortization period. The trigger point is listed in your mortgage contract.

Adjustable payments with a variable interest rate

With adjustable payments, the amount of your payment changes if the interest rate changes. A set amount of each payment applies to the principal. The interest portion changes as the interest rates change. You’ll know in advance how much of the principal you’ll have paid at the end of the term.

Land transfer tax in British Columbia

Land transfer tax rates in British Columbia are calculated based on the purchase price of your property (see chart below for details).

Home Purchase Price	Marginal Tax Rate
First $200,000	1.0%
$200,001-$2,000,000	2.0%
Over $2,000,000	3%
Over $3,000,000	+2% for residential properties (5% total)

What Affects My Mortgage Rate in British Columbia?

Factors such as credit score and income play a big part in qualifying for the lowest interest rate in British Columbia. The riskier a borrower appears, the higher the interest rate can be. Rate is definitely not the most important aspect of a mortgage, however, as many rock-bottom rates often come from no-frills mortgage products. In other words, even if a borrower qualifies for the lowest rate, they must often give up other features such as prepayments and porting privileges when opting for the lowest-rate product.

There are many other ways to save money over the mortgage term instead of taking the lowest rate, including rounding up mortgage payments or making lumpsum payments when bonuses, etc are received throughout the year. It’s important, however, not to exceed the allowable limit on annual extra payments with your lender.

Down Payment

The size of your down payment will determine whether you must also pay mortgage default insurance in addition to your regular mortgage payments. Mortgage default insurance is required any time you make a down payment that’s less than 20% of the property’s value.

Amortization Period

If you select a longer amortization period (the maximum is 25 years on mortgages with less than a 20% down payment and 30 years on mortgages with down payments of 20% or higher), your individual mortgage payment will be lower because they’re spread out over a longer period of time. Longer amortizations can come equipped with higher interest rates. You’ll also pay more interest the longer you take to pay off your mortgage.

Property Usage

If you’re buying a home that you personally intend to live in, this is considered your primary residence and is known as owner occupied. If you’re buying an investment property that you intend to rent to others, you’ll pay higher interest rates than on your primary residence. The logic behind this is that people will pay the mortgage on their primary residence before any rental properties. As such, lenders build added risk into the rates for rental properties.

Mortgage Type

The type of mortgage you select – such as variable vs fixed and open vs closed – will play a role in your mortgage rate. Each selection is a personal choice based on a number of factors.

When looking at open vs closed mortgages, for instance, it’s important to note that open mortgages are priced higher because of the flexibility they offer to pay the mortgage off at any time without facing a penalty.

And while variable mortgages have proven to be more cost effective over time than fixed mortgages, some people prefer the certainty of having the same payment throughout the mortgage term as is the case with fixed mortgages.

Your Credit Score

The ideal candidate for a traditional mortgage lender has a credit score that’s 680 and above. The higher the score is above 700 the better – with a maximum score of 900 possible – as borrowers will qualify for the lowest rates. There are options available for people with lower scores as well, but you can expect rates to be higher and terms to be shorter in these circumstances. nesto has strict lending guidelines that require a minimum credit score and no recent missed payments.

How nesto Works

Our salaried mortgage advisors are rewarded based on your satisfaction. We’re here to help you reach your goal and guide you through the complicated world of home financing. #yesyoucan #empowermentisthenewsexy

Globally, each mortgage professional knows the market’s best rates every time they check their email. Only a few of them will give you that rate without making you work for it. nesto’s here to change the industry for this very reason. You always get the best rate upfront with nesto.