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Your Guide to Getting the Best Mortgage Rates in Yukon
When you’re looking to find the very best mortgage rates in Yukon, 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.
Yukon has plenty to offer homeowners, from an active employment market to picturesque views. But the cost of living in the territory can be higher than average, making it important to find the best rate possible on your mortgage loan. This page will help you understand what to expect from the Yukon homebuying process so you can choose the best loan for you.
Yukon is a wild, mountainous and sparsely populated territory in northwest Canada. Kluane National Park and Reserve includes Mount Logan, Canada’s highest peak, as well as glaciers, trails and the Alsek River. In the far north is Ivvavik National Park, with protected calving grounds for Porcupine caribou. In the south are numerous glacier-fed alpine lakes, including boldly coloured Emerald Lake.
Key facts about Yukon:
- Whitehorse is the territorial capital and Yukon’s only city
- Whitehorse’s downtown and Riverdale areas occupy both shores of the Yukon River, which originates in British Columbia and meets the Bering Sea in Alaska
- The city was named after the White Horse Rapids for their resemblance to the mane of a white horse, near Miles Canyon, before the river was dammed
- Known for snow-capped mountains, volcanoes (active and dormant), glaciers, snowmelt lakes, cold water rivers, coniferous forests and the stark landscape of the Arctic’s frozen tundra
- The territory has three national parks and eight provincial parks. Kluane National Park and Reserve, located near the Alaskan border, is the most popular national park in the territory. The park’s Saint Elias Mountain Range is home to seven of Canada’s 10 highest mountains, including Mount Logan, the country’s highest point. It was declared a UNESCO World Heritage Site in 1979 for its spectacular glacier and icefield landscapes as well as the importance of grizzly bears, caribou and Dall sheep habitat
Learn About Rates And Mortgages in Yukon
Yukon doesn’t have the population seen in other areas of Canada, so the rates can differ from other territories and provinces. For that reason, you likely have questions about borrowing money to buy a home in the territory. Here are some frequently asked questions about Yukon mortgage rates to get you started.
What are today’s mortgage rates in Yukon?
While in any Canadian province, mortgage rates can change daily, this is especially true in Yukon. The sparse population and extra-chilly winters tend to make the lending landscape a little less competitive. That gives Yukon lenders the freedom to bump rates up.
But online lending has helped this situation. Yukon homeowners are no longer limited to the brick-and-mortar financial institutions servicing the territory. But even though you can price online lenders, those providers will base rates on market trends for the area. That makes it more important than ever to compare rates and lock a good rate in while you can.
Why compare Yukon mortgage rates on nesto?
Searching for a mortgage takes time. To get the best deal on your new Yukon home, it’s important to shop around, but requesting quotes from individual lenders is a process. You might end up settling for only one or two quotes in the interest of speeding up the process.
nesto can give you the best rates without the work. With one quick application, nesto can find the best possible rate for the Yukon market and for your specific situation.
Should I get an open or closed mortgage in Yukon?
When you sign on with a lender for your Yukon home, you’re typically agreeing to a five-year term.
You’ll also need to decide between an open or closed mortgage. The best option for you depends on your own unique circumstances, including how long you plan to stay in your home.
A closed mortgage offers lower interest rates in exchange for locking your mortgage in for the full term. If you need out of the mortgage early, you’ll have to pay a penalty. You’ll also be limited in putting money toward the principal in the hopes of reducing the balance. You might get a little leeway on extra payments, but you won’t have the freedom you’ll get with an open mortgage.
With an open mortgage on your Yukon home, enjoy plenty of flexibility, both in prepaying and ending your mortgage early. But this flexibility comes at a price.You’ll pay higher interest rates, but you aren’t locked in like you are with a closed mortgage. If you don’t plan to sell your home or get a sudden influx of extra income in the next five years, a closed mortgage will likely be a better option. But if you want the flexibility to pay things off early, an open mortgage is worth considering.
Should I use a mortgage broker, bank or lender in Yukon?
For those who live in a well-populated area of Yukon like Whitehorse, it can’t hurt to check in with a couple of local lenders while you’re looking. In some cases, local lenders can help if you have less-than-stellar credit or a high debt-to-income ratio. But Yukon itself isn’t loaded with local lenders, which means that often, you’ll find that going online broadens your options considerably.
There could be another reason to go local. If you like the face-to-face interaction that comes with a brick-and-mortar option, you might simply prefer to be in person. Even then, you’ll be positioned to get a better rate if you do some rate comparison online and see how it measures up to what you’re offered at your favorite bank.
From there, it’s important to note the differences between banks, brokers and credit unions. A mortgage broker specializes in helping borrowers find the right lender for a home purchase. This option can be online or in person and can often help you get a better deal. Small lenders and credit unions are a good choice if you’re having a tough time qualifying, while large corporate lenders can sometimes be competitive, but often tend to fall exactly where the market rate is for the area.
As a lender, nesto makes less than the average broker or mortgage specialist, but we get the peace of mind knowing that we helped you save thousands of dollars on your mortgage.
Should I try to find a mortgage with a rate hold in Yukon?
Currently, mortgage rates in Canada are holding fairly steady, but that could change. The Bank of Canada determines interest rates, and even one percentage point could make a big difference. If you’re looking for a home, you might understandably be nervous about being quoted a rate, only to have it increase the next day.
That’s where a rate hold can come in handy. The hot housing markets in areas like Toronto and Montreal could prompt a raise in interest rates, leading a Yukon homebuyer to find that $1,000 a month mortgage will suddenly cost $1,200 or $1,400. By locking in a rate using a rate hold, you can ensure your preapproval interest rate will stay the same for the 30, 60, or 120 days it takes you to find a house.
About the Yukon Housing Market
The coronavirus pandemic has been tough on the Yukon housing market. This is especially true in the capital of Whitehorse, which has a steady but aging population. Lumber supply issues have left developers unable to fulfill demand for new construction, and rising prices have put existing homes out of reach of some residents. Further challenging the housing market is an increasing migration to Yukon from other areas of Canada, as well as other countries.
First-Time Home Buyer Programs in Yukon
First-time homebuyers who are willing to consider one of the rural areas outside Whitehorse may qualify for a first-time homebuyers loan. Yukon Housing offers loan financing for up to 30 years with a five-year term on new construction in rural Yukon. You’ll enjoy interest-free payments during construction and an interest rate at least 1% below the current posted rate once construction is complete.
Yukon homeowners can also apply for rebates on any renovations or upgrades you do to your home that make it more energy efficient. You can apply and qualify for both the rebates and the loan financing program.
Yukon Historical Mortgage Rates Trends
The past five years have been a tumultuous period for the Yukon housing market. The pandemic brought rates down to a 20-year low in 2021, plunging below 1.4% for the first time. The rate has begun to climb back up in 2022, though, currently resting at 1.99%. But the rate has a long way to go before it reaches 2019’s high of 3.24%.
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.
Land transfer tax in Yukon
Yukon residents pay a land transfer tax that’s based on the value of the property. This tax is part of your closing costs, and it covers the property switching hands from the previous owner to you. That rate can vary based on local governments, so your rate in the big city of Whitehall might be dramatically different from the rural areas that make up the rest of the territory. Homebuyers in the Yukon territory play a flat fee based on the value of their home that includes both the title transfer plus a mortgage fee. A minimal assurance fee may also be added.
– Whitehall – $50-$750 title transfer plus $50-$1,000 mortgage fee
– Dawson – $50-$750 title transfer plus $50-$1,000 mortgage fee
What Affects My Mortgage Rate in Yukon?
Factors such as credit score and income play a big part in qualifying for the lowest interest rate in Yukon. 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. nesto has also strict lending guidelines that require a minimum credit score and no recent missed payments.
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
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.
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