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Your Guide to Getting the Best Mortgage Rates in Halifax
When you’re looking to find the very best mortgage rates in Halifax, 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.
An Atlantic Ocean port in eastern Canada, Halifax is the capital of Nova Scotia.
A major business centre, it’s also known for its maritime history. The city’s dominated by the hilltop Citadel, a star-shaped fort completed in the 1850s. Waterfront warehouses known as the Historic Properties recall Halifax’s days as a trading hub for privateers, notably during the War of 1812.
With a population of 412,674, Halifax is a major economic centre in Atlantic Canada, including a large concentration of government services and private sector companies.
Learn About Rates & Mortgages in Halifax
Welcome to our Frequently-Asked Questions (FAQ) section, where we answer the most popular questions our nesto advisors receive on a daily basis, designed to help you make informed mortgage decisions every time you need a new mortgage or to renew/refinance an existing one.
Why compare Halifax mortgage rates on nesto?
By comparing Halifax mortgage rates on nesto, you’re always getting the most up-to-date information, which helps you save money throughout your time as a homeowner.
When comparing rates, be sure to look at similar terms (such as three or five years) and mortgage types (fixed rate vs variable rate) so you’re measuring similar products and not looking solely at rates. Mortgage rates and features vary by lender so, in order to gain an accurate comparison, you have to look at similar offerings.
Are Halifax mortgage rates higher than other cities?
Today’s mortgage rates in Halifax vary depending on the specific bank or other lender offering each product (see chart). nesto’s advanced technology empowers us to take a snapshot of the entire market at any given time to ensure you always have the latest rate information at your fingertips to help you make the most informed decisions about whether to stay the course or lock in your rate.
Should I get a fixed-rate or variable-rate mortgage in Halifax?
Whether you should select a fixed-rate or variable-rate mortgage depends on your specific risk tolerance and comfort level.
If you enjoy the convenience of knowing exactly what you’re going to pay each month towards your mortgage, a fixed rate definitely makes sense because your payments won’t change. In fact, you can think of a fixed rate as insurance that your rate will not rise over the term you’ve selected (1-10 years). 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, young families with large mortgages relative to their income may be better off opting for the peace of mind that a fixed rate provides.
Over time, however, variable-rate mortgages have been shown to save the most amount of money. A variable-rate mortgage fluctuates with the lender’s prime rate throughout your mortgage term. So, while your variable-mortgage payment will remain the same throughout your term, your interest rate may change based on market conditions. If the prime rate rises or falls, this impacts the amount of principal you pay off each month. When rates on variable mortgages drop, more of your payment is applied to your principal balance. And, conversely, if rates increase, more of your payment will go towards the interest portion of your mortgage.
About the Halifax Housing Market
With housing demand still outpacing supply, the sellers’ market is likely to continue in Halifax and much of the province throughout 2022.
Nova Scotia’s population reached a major milestone in 2021, hitting the one million mark. Newcomers arrived from other parts of Canada as well as different countries, as Halifax and most of the province experienced another strong year for immigration despite the pandemic.
Halifax closing costs
Closing costs refer to a large variety of different fees and charges associated with the completion of your mortgage deal, including all legal and administrative expenses you’ll be responsible for paying leading up to, or on, your home’s closing date. It’s important to include these costs in your budget because, in most cases, they can’t be rolled into your mortgage payments.
Closing costs range depending on the specific property you plan to purchase but, as a safe estimate, set aside 5% of the purchase price as a buffer to cover these expenses. They typically amount to anywhere from 3-5% of the home’s price, but it’s always wise to err on the side of caution by saving more money than you need. Any surplus can be used to help furnish and decorate your new home, or put aside for future maintenance costs. There really is no such thing as saving too much. See: Closing Costs: What are They and How Much Will You Pay?
Halifax first-time home buyer programs
There are several first-time home buyer incentives and programs available in Nova Scotia 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
Halifax Mortgage Brokers
Looking to buy in Halifax? It’s best to speak to someone who understands the market to help you navigate mortgage rates in this city. Don’t hesitate to submit an application online and one of our advisors will be happy to help you find the best product for your needs.
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-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.
What Affects My Mortgage Rate in Halifax?
Factors such as credit score and income play a big part in qualifying for the lowest interest rate in Halifax. 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.
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.
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.
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.
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.
How to Apply for a Mortgage in Halifax
When applying for a mortgage, you’ll be asked to provide a number of documents to prove such things as your employment and income, proof of down payment and your general finances including assets and debts.
Meet with a mortgage expert
Having a mortgage expert looking out for your best interest while navigating the abundance of mortgage choices available today puts you at a huge advantage over shopping direct with one bank or lender.
Mortgage experts ensure you always have the mortgage that’s best suited to your unique needs and finances – regardless of whether you’re a first-time home buyer, upgrading to a new home, renewing/refinancing an existing mortgage or buying an investment property or vacation home. They can find the ideal mortgage for you by comparing all the offerings from multiple lenders, including banks, credit unions and trust companies, as well as alternative and private funding specialists. In other words, your mortgage expert acts as an intermediary between the you (the borrower) and the lender.
Acquire all necessary documents
Gathering as many documents as possible before speaking to your mortgage expert will help get a quick preapproval or final mortgage approval.
Required documents include:
- Proof of Identity
- Employment Verification
- Income Verification
- Proof of Assets
- Confirmation of Down Payment
- List of Debts/Liabilities
- Purchase and Sale Agreement
- Real Estate Listing
- Credit Report
- Mortgage Insurance Information
- Appraisal Report
- Property Insurance
- Legal Representation
- Survey of Property
Apply for mortgage financing
With all of the required documentation in hand, your mortgage expert will be able to determine the best lender offering – including mortgage features and rate – to suit your specific needs and submit your application for approval.
Sign & finalize your mortgage
Before your mortgage closing date, you’ll be required to review and sign all final mortgage documents with your real estate lawyer to ensure financing is in place when you take possession of your new home.
How nesto Works
We offer all the help of a mortgage broker, without the commission. Simply put, 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
Every 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.
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*Applicable with an accepted offer to purchase or renew. Conditions apply