Top Canadian Mortgage Lenders in 2021

Canadian mortgage statistics have shown that property sales have soared despite the pandemic because interest rates have never been so low. And the mortgage rates forecast by the Canada Mortgage and Housing Corporation (CMHC) suggests prices will remain this low for the next three years to support the economy.

That’s why we decided to review the best Canadian mortgage rates and the companies offering them. Here are the sections that we’ll cover:

☑️ Methodology
☑️ Company Reviews
☑️ Best Canadian Mortgage Companies Guide
☑️ Mortgage Types
☑️ The Best Canadian Mortgage Rates in 2021 at a Glance
☑️ How to Choose the Best Mortgage
☑️ Frequently asked questions

Let’s crack on.

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7 Canadian Mortgage Lenders that Stand out in 2021

1. Citadel Mortgages

Citadel is one of the largest full-service mortgage brokerages that operates in Ontario, Alberta, Saskatchewan, New Brunswick, Prince Edward Island, Nova Scotia, British Columbia, and Nunavut. It offers some of the lowest rates for all your financing needs - residential, commercial, or personal. Full Review

  • Excellent mortgage rates
  • Variety of mortgages types
  • Various rewards and perks as part of the mortgage deals

Citadel is one of the largest full-service mortgage brokerages that operates in Ontario, Alberta, Saskatchewan, New Brunswick, Prince Edward Island, Nova Scotia, British Columbia, and Nunavut. It offers some of the lowest rates for all your financing needs - residential, commercial, or personal. Full Review

2. CanWise Financial

Based in Toronto, CanWise is one of the most popular mortgage brokerages in Canada. It has secured excellent mortgage rates for $7.5 billion worth of deals. CanWise Financial is also a CMHC-approved lender. Full Review

  • Allows 20/20 prepayment facility
  • Penalty-free mortgage transfers
  • Some of the best fixed-rate mortgages on offer

Based in Toronto, CanWise is one of the most popular mortgage brokerages in Canada. It has secured excellent mortgage rates for $7.5 billion worth of deals. CanWise Financial is also a CMHC-approved lender. Full Review

3. DUCA

A Toronto-based credit union founded in 1954, DUCA offers competitive mortgage rates to buyers as well as personal banking services like chequing and savings accounts and loans. DUCA Credit Union is a member-owned institution. Full Review

  • Offers mortgages to those with poor credit scores
  • Penalty-free blends-to-terms (adding money to mortgage amounts)
  • Customizable mortgage deals

A Toronto-based credit union founded in 1954, DUCA offers competitive mortgage rates to buyers as well as personal banking services like chequing and savings accounts and loans. DUCA Credit Union is a member-owned institution. Full Review

4. Equitable Bank

With its headquarters in Toronto, Equitable Bank offers single-family and residential borrowing options. EB was founded in 1970 under the name of the Equitable Trust Company; it became a Schedule I Bank that offers savings products in 2013. Its digital subsidiary is called EQ Bank. Full Review

  • Diverse reverse mortgages options
  • Flexible prepayments
  • Robust customer service round the clock

With its headquarters in Toronto, Equitable Bank offers single-family and residential borrowing options. EB was founded in 1970 under the name of the Equitable Trust Company; it became a Schedule I Bank that offers savings products in 2013. Its digital subsidiary is called EQ Bank. Full Review

5. Motusbank

Motusbank provides online-only banking solutions (chequing and savings accounts, financial planning, lines of credit, and more) along with a host of tools and explainers. It is a subsidiary of the Meridian credit union. Full Review

  • Variety of mortgage types to choose from
  • Secure lock 90 day period
  • “Friends and Family mortgage” that allows joint ownership of loans

Motusbank provides online-only banking solutions (chequing and savings accounts, financial planning, lines of credit, and more) along with a host of tools and explainers. It is a subsidiary of the Meridian credit union. Full Review

6. Meridian Credit Union

Meridian is the largest credit union based in Ontario. It’s entrusted with the management of $27.2 billion worth of assets. Meridian provides its members with a full range of financial products, including affordable mortgages, through a network of 89 branches. Full Review

  • Hybrid/joint/construction mortgage types to suit all buyers
  • Skip-a-payment windows for one month every year
  • Cashback of 3% on some of their fixed-rate products

Meridian is the largest credit union based in Ontario. It’s entrusted with the management of $27.2 billion worth of assets. Meridian provides its members with a full range of financial products, including affordable mortgages, through a network of 89 branches. Full Review

7. Tangerine

Tangerine Bank started life as ING Direct Canada back in 1997. Canada’s most popular digital bank, Tangerine, lends out mortgages at great rates. Tangerine mortgages are portable and come with a lock period of up to 120 days. Full Review

  • 25/25 prepayment privileges
  • Most popular fixed mortgage rates
  • Dedicated support from mortgage agents

Tangerine Bank started life as ING Direct Canada back in 1997. Canada’s most popular digital bank, Tangerine, lends out mortgages at great rates. Tangerine mortgages are portable and come with a lock period of up to 120 days. Full Review

Evaluation Methodology

Let us tell you a bit about how we conducted our search for the companies offering the lowest mortgage rates for your housing needs.
We reviewed every customer feedback and review in order to analyze each supplier and obtain the top mortgage rates. Some of the factors we considered to evaluate the companies were as follows:

☑️ Their presence in the market

☑️ The types of mortgages they offer

☑️ Downpayment, terms, and prepayment options

☑️ Customer reviews

☑️ Standout features

☑️ BBB rating (if available)

☑️ The services they offer

First, we conducted exhaustive research to find out the products on offer at each company website and determined their unique features.

Second, we tested out the application procedures for ourselves, navigated the websites, and referred customer reviews to identify areas where the products didn’t deliver.

Third, we drew up a list of drawbacks and benefits of each lender.

Finally, we determined how each company measured up in the competitive scenario and outlined what each company is best for.
Our verdicts are curated on the uniqueness, performance, and reviews received for each company.

Detailed Reviews

Citadel Mortgages
Citadel Mortgages

Best for conventional broker experiences with cheap interest rates

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  • ✅ Feature-rich website
  • ✅ Instant prequalification
  • ✅ Agents with expert knowledge
  • ✅ Innovative Beat Your Rate program
  • ✅ Seamless customer service
  • ✅ Reasonably low mortgage rates
  • ⛔️ 1-star BBB rating

Citadel is one of the largest full-service mortgage brokerages, which operates in several provinces. Citadel adopts a “client first” approach and promises round-the-clock customer support for residential, commercial, and personal financing needs. 

Types of Mortgages

Citadel promises to deliver the most attractive Canadian mortgage rates for all kinds of financing needs, whether they’re residential, commercial, or personal. 

Residential Finance
  • Purchase
  • Refinance
  • Transfer mortgages
Commercial Finance
  • Purchase
  • Refinance
Equity
Second Mortgages
Home Equity Line of Credit (HELOC)
Private Mortgages

Moving on to the mortgage rates, the variable rates at Citadel come insured:

  • 3 Year Variable Rate – high ratio insured 0.99%
  • 5 Year Variable Rate – high ratio insured 0.95%
Fixed Mortgages

Fixed mortgage rates in Canada are always fixed higher than variable mortgages. Here are the rates on fixed mortgages that Citadel offers: 

  • 1 Year Fixed 1.74%
  • 2 Year Fixed 1.44%
  • 3 Year Fixed 1.39%
  • 4 Year Fixed 1.49%
  • 5 Year Fixed 1.54%
  • 7 Year Fixed 2.14%
  • 10 Year Fixed 2.49%
  • Line Of Credit (HELOC) 2.65%

The other mortgage types on offer are: 

Refinance Insured (Up to 80% LTV)
  • Variable Rate 1.40%
  • 5 Year Fixed 2.09%
Purchase Mortgages (Upto 80% LTV)
  • Variable Rate 1.25%
  • 5 Year Fixed 2.05%

Citadel also brings you a hybrid mortgage at one of the lowest interest rates in Canada5 Year Special 5 in 1 at the rate of 1.79%

Citadel makes mortgages at these rates available with less than 20% down payment

Key Features

Citadel Mortgages offers added perks and rewards to customers who avail of their services. They have many attractive offers running for a limited time that you can view in the “Special offers” menu. You may pick and choose between offers to suit your mortgage plan! 

Let’s look at what they’re offering right now: 

Air Miles Reward

With every mortgage deal you close with the company, you could be rewarded with up to 1,000 miles on Air Miles

Cashback

As soon as your mortgage is funded, you could win up to $2,500 as cashback. 

Free Appraisal

If you choose a private mortgage with Citadel, you could receive a free appraisal offer. 

15 cents off gas bills

On closing a mortgage with Citadel, you could receive up to 250 litres of gas, with 15 cents off. 

Beat My Rate

Citadel has developed the Beat Your Rate Program to emphasize its commitment to bring you the best and most affordable mortgage rates in Canada

Wondering what it’s all about?

This program is a compact 13-question long quiz where you input the details of a mortgage rate you might have found elsewhere. A group of agents at Citadel will then review your rate and let you know if it’s the lowest and best rate in the market.

If not, they can offer you one of Citadel’s rates that’s better than the one you’ve got.

Sounds like a win-win situation for buyers, doesn’t it?

Approval Process

Citadel boasts of a feature-rich website with a mortgage payment calculator, instant pre-qualification tool, request a call feature, find a local agent feature, and many more. Anybody who signs up at the website can get pre-qualified instantly. Citadel promises to review your credit score without affecting it. 

After getting an estimate on how much you can afford, you can click on “Get Approved” and fill out your details. Alternatively, you can request a call from their agents to get approved. A decent credit score should get you in easily. 

  • Repetitive automated calling

Verdict

Citadel offer some of the best mortgage rates in 2021, be it purchase or refinance

If you’re a first-time homebuyer, Citadel can be an excellent choice, thanks to the government-sponsored First-Time Home Buyer Incentive Program (FTHBI). You can simply hand over your details, and they will take you step-by-step through the process. 

First, you’ll get pre-qualified, then approved, and, finally, begin working with an agent to buy your home. The heavy lifting, as they say, will be done by the brokers. The added perks and rewards program goes a long way in cementing client relationships beyond just getting them the lowest mortgage rates.

DUCA
DUCA

Best for those with a bad credit score looking for customizable mortgages

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  • ✅ Mortgages available to candidates with relatively poor credit scores
  • ✅ Penalty-free blends-to-term
  • ✅. Variable rates based on discounted 5-year mortgage fixed rates (2.99%) rather than the Bank of Canada's quoted rate of 4.79%
  • ✅ Innovative and customizable products
  • ⛔️ Comparatively higher mortgage interest rates and closing costs
  • ⛔️ Subject property must be within 75 kilometres of a DUCA branch
  • ⛔️ Very few local branches

This Toronto-based credit union is part of the DUCA network. As the Dutch Canadian Toronto Credit Union Ltd., it was founded in 1954 by Dutch immigrants. It has 16 branches across Southern Ontario and more than 70,000 members. In addition to mortgages, member-owned DUCA offers personal loans and banking services. 

Types of Mortgages

Though DUCA started small, it has grown rapidly. It has been delivering one-stop solutions to Canadians who are frustrated with traditional banking. It has made quite a name for offering some of the most favourable Canadian mortgage rates. It offers co-owned mortgages, company-exclusive mortgages, as well as standard mortgages. 

Let’s take a look:

Low Rate High Ratio Insured Mortgages
  • 6 Month Convertible 4.25%
  • 1 Year Fixed Closed 2.69%
  • 2 Year Fixed Closed 2.59%
  • 3 Year Fixed Closed 1.79%
  • 4 Year Fixed Closed 2.39%
  • 5 Year Fixed Closed 2.04%
  • 3 Year Variable Rate 3.45%
  • 5 Year Variable Rate 2.95%

Low-rate mortgages at DUCA come with prepayment options of up to 20% annually. If you switch to DUCA, they promise to cover your transfer fees up to $1,000 (for mortgages $400,000+) or up to $250 (for mortgages under $400,000)

 

DUCA Exclusive Mortgages
  • 6 Month (Convertible) 4.35%
  • 1 Year Fixed Closed 2.99%
  • 2 Year Fixed Closed 2.69%
  • 3 Year Fixed Closed 2.79%
  • 4 Year Fixed Closed 2.89%
  • 5 Year Fixed Closed 2.44%
  • 6 Year Fixed Closed 4.59%
  • 7 Year Fixed Closed 4.79%
  • 3 Year Variable Rate 3.55%
  • 5 Year Variable Rate 3.25%
  • 1 Year (Open) 5.85%

 

Co-ownership Mortgages

  • 6 Month (Convertible) 5.45%
  • 1 Year Fixed Closed 4.39%
  • 2 Year Fixed Closed 4.09%
  • 3 Year Fixed Closed 4.19%
  • 4 Year Fixed Closed 4.29%
  • 5 Year Fixed Closed 3.84%
  • 1 Year (Open) 6.45%

 

Second Mortgages

  • 6 Month (Convertible) 4.60%
  • 1 Year Fixed Closed 3.24%
  • 2 Year Fixed Closed 2.94%
  • 3 Year Fixed Closed 3.04%
  • 4 Year Fixed Closed 3.14%
  • 5 Year Fixed Closed 2.69%
  • 6 Year Fixed Closed 4.84%
  • 7 Year Fixed Closed 5.04%
  • 3 Year Variable Rate 3.80%
  • 5 Year Variable Rate 3.50%
  • 1 Year (Open) 6.10%

At DUCA, the maximum amortization is 30 years on a conventional purchase and 25 years on a refinance mortgage in Canada or an insured mortgage.

Key Features

DUCA sports a team of experts called Mobile Mortgage Specialists who strive to bring you only the top Canadian mortgage rates. They’ll be putting their years of knowledge to good use to help you decide which deal suits you best. You can review the brief portfolios of the mortgage specialists and dial any of them up to meet for advice, wherever and whenever you deem fit. 

DUCA offers Flex mortgages in their exclusive section, and this type is customizable. What’s great about the Flex mortgages? 

Here are some reasons:

  • You can mix and match between a maximum of 4 components/products.
  • Craft a mortgage plan that’s unique to your needs. 
  • Options vary between variable rates, fixed rates, and the PrimeLine line of credit.

Approval Process

Each annual percentage rate (APR) is calculated using a $100,000 mortgage with monthly payments and a 25-year amortization. The APR assumes that no fee(s) apply. If you require an appraisal or pay any additional fee(s), your APR will rise. 

All residential mortgages are determined semi-annually rather than in advance. 

Flex mortgage rates are subject to a 10 bps increase for mortgage amortization longer than 25 years.

To avail of mortgage-related services at DUCA, all applicants must fulfill the DUCA Financial Services Credit Union lending criteria. To learn more about what these criteria entail, get in touch with the company at their registered contact number. You may also choose to visit your nearest branch for more information. 

Verdict

If we disregard the relatively small number of DUCA branches, we’ll see that DUCA offers stiff competition to traditional banks by lending mortgages to those with poorer credit scores or former bankruptcies. Additionally, it has rolled out customizable Flex mortgages to meet the diverse needs of buyers. As a final perk, they readily offer 20% annual prepayment options. 

Equitable Bank
Equitable Bank

Best for reverse mortgages with flexible prepayment options

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  • ✅ Seamless round-the-clock customer service
  • ✅ Robust digital, branchless financial solutions
  • ✅. Variety of reverse mortgages on offer
  • ✅ Great reverse mortgage rates
  • ✅ Trustworthy bank managing almost $36 billion worth of Canadian mortgages
  • ✅. Flexible prepayment privileges
  • ⛔️ Limited availability of standard mortgage types
  • ⛔️ Not ideal for those who prefer physical bank locations, as most operations are online

Equitable Bank was founded in 1970 as The Equitable Trust Company. Today’s it’s Canada’s ninth-largest Schedule I bank. It specializes in two kinds of lending services – single-family residential and commercial. It has its headquarters in Toronto. 

Types of Mortgages

Equitable Bank specializes in reverse mortgage rates. Let’s quickly walk you through all the mortgage interest rates the bank offers:

Standard Mortgages
  • 1 year fixed (closed) 2.69% (APR 4.099%)
  • 2 year fixed (closed) 2.89% (APR 3.669%)
  • 3 year fixed (closed) 3.19% (APR 3.798%)
  • 4 year fixed (closed) 4.09% (APR 4.325%)
  • 5 year fixed (closed) 3.59% (APR 4.036%
Reverse Mortgage Flex (setup fee: $995)
  • 6 Month Fixed: 4.29% (APR 5.94%
  • 1 Year Fixed 3.89% (APR: 4.71%)
  • 2 Year Fixed: 4.34% (APR: 4.71%)
  • 3 Year Fixed: 4.39% (APR: 4.62%)
  • 5 Year Fixed: 4.89% (APR: 4.99%)
  • 5 Year Adjustable P + 1.64% (APR 4.24%)
Reverse Mortgage Flex PLUS (setup fee: $995)
  • 6 Month Fixed 5.09% (APR 6.69%)
  • 1 Year Fixed 4.69% (APR 5.48%)
  • 2 Year Fixed 5.14% (APR 5.49%)
  • 3 Year Fixed 5.19% (APR 5.39%)
  • 5 Year Fixed 5.69% (APR 5.76%)
  • 5 Year Adjustable P + 2.44% (APR 5.04%)
Reverse Mortgage Flex Lite Rates (setup fee: $995)
  • 6 Month Fixed 4.29% (APR 5.94%)
  • 1 Year Fixed 3.79% (APR 4.61%)
  • 2 Year Fixed 3.94% (APR 4.32%)
  • 3 Year Fixed 3.99% (APR 4.23%)
  • 5 Year Fixed 4.29% (APR 4.40%)
  • 5 Year Adjustable: P + 1.64% (APR 4.24%)

Equitable Bank allows prepayment privileges of mortgage interests subject to the following conditions:

Interest payment – Prepay any of your interest outstanding once per calendar month.

Principal payment – Prepay up to 10% of your principal once per a 12-month period (starting from your initial advance).

After 5 years – Prepay more than 10% of your principal or the entire outstanding balance within 30 days of an interest rate reset date.

After 10 years – Prepay more than 10% of your principal or the entire outstanding balance at any time.

Keep in mind that you could incur prepayment penalties if you exceed your prepayment privileges. 

Key Features

On select Equitable Bank mortgage products, you might be able to increase your regular payments once every 12 months, starting on the Interest Adjustment Date or the anniversary of that date. 

 

All Equitable Bank mortgage loans become open at maturity.  You can repay them either in part or in full without a prepayment charge before the renewal.

 

A skim-through of Equitable Bank’s rates shows us what it does best – reverse mortgages. Not only does it offer excellent reverse mortgage rates, but it also lends support through reverse mortgage experts for clarification of doubts. 

Let’s learn more about this kind of mortgage: 

A reverse mortgage is a type of loan that is obtained against your primary residence in Canada. This financing option provides you with tax-free cash with no required ongoing payments.

Your home will remain yours as long as you live there at least six months a year, you keep it in good condition, and you pay your property taxes on time.

As long as you meet your mortgage obligations, you’ll never owe more than the fair market value of your property. Fair Market Value is the sum that would be paid on the open market, on the relevant date, to purchase the property, supposing no legal claims against the property.

Approval Process

You are eligible for a reverse mortgage if:

  • You are 55 or older and live in one of the main urban areas of Ontario, Quebec, British Columbia, or Alberta.
  • Your primary home is your residence (you live there for at least six months of a calendar year).
  • As joint borrowers, all titleholders of the residence apply (in ON, AB, BC).
  • The residence is occupied by the owner and is not a second home or cottage.
  • Your house is detached, semi-detached, a condo, or a townhouse.

Verdict

Equitable Bank has restructured the reverse mortgages game and has built a strong clientele by offering the lowest mortgage rates. Its standard mortgages are an especially appealing option for Millennials because of its digital operational sphere and 24/7 customer service. One of the most appealing things about Equitable is the prepayment privileges it offers its customers. 

Motusbank
Motusbank

Best for online mortgage solutions and joint ownership plans

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  • ✅ Quick and convenient
  • ✅ Feature-rich website
  • ✅ Competitive fixed and variable mortgage rates
  • ✅ Allows you to pay up to 20% of the original principal per year or increase your monthly payment by up to 20% of your original payment plan every year without penalty.
  • ✅ Stress-free lock period of up to 90 days
  • ⛔️ Relatively new and has fewer customer reviews
  • ⛔️ No in-person meetings with lenders

A new player in Canada’s virtual banking segment, motusbank brings full-service financing solutions at remarkably attractive rates. It prioritizes customers by converting them to members – motusbank doesn’t have any public shareholders. 

As a conglomerate of Meridian, one of Canada’s largest and most popular credit unions, motusbank has instant credibility when it comes to providing more customer-focused service than conventional banking. Its user-friendly website and bold, colourful branding set it apart from Canada’s Big Five financial powerhouses.

Types of Mortgages

Motusbank offers discounted mortgage rates alongside the posted interest rates. Let’s take a look at the various types of mortgages:

Fixed-rate Mortgages
  • 6 Month Convertible Fixed Mortgage 4.00%
  • 1 Year Fixed Mortgage (open) 6.00%
  • 1 Year Fixed Mortgage 3.09% (special rate 2.09%)
  • 2 Year Fixed Mortgage 3.19% (special rate 2.09%)
  • 3 Year Fixed Mortgage 3.49% (special rate 2.09%)
  • 4 Year Fixed Mortgage 3.74%  (special rate 2.09%)
  • 5 Year Fixed Mortgage 4.59% (special rate 2.09%)
  • 5 Year Fixed Mortgage (high ratio) 4.59% (special rate 2.09%)
Variable-rate Mortgages
  • 5 Year Variable Mortgage (open) 4.45%
  • 5 Year Variable Mortgage 1.55%
  • 5 Year Variable Mortgage (high ratio) 1.55%
Home Equity Line of Credit (HELOC)  
  • Interest rate 2.75%

Key Features

Motusbank draws buyers in with its interactive and colourful website. It offers in-depth articles, affordability calculators, and a host of other features. It is a one-stop digital solution for Canadians’ financial needs.

Besides some of the most advantageous mortgage rates in Canada, motusbank offers a joint ownership mortgage called “Friends and Family Mortgage.” Whether you’re moving into a new house with friends, refinancing an existing property, or switching from a different lender, this package can be included in all these scenarios. 

What makes it great? Here are some cues:

  • It’s perfect for anyone who might not qualify for a conventional mortgage on
    their own.
  • It can be applied to any motusbank mortgage.
  • It includes a flexible repayment schedule and 20/20 prepayment privileges, plus a skip-a-payment feature and a 90-day rate guarantee.

While motusbank does allow 20/20 prepayment, there are cases when prepayment penalties could apply:

  • Mortgage renewal before maturity
  • If you prepay more than 20% of the amount
  • If you select a new term while refinancing
  • When you transfer your mortgage to another lender
  • If you pay off your mortgage before the term

Approval Process

To be eligible for a motusbank mortgage, you must be a Canadian citizen or permanent resident and be of age. Additional details about eligibility can be obtained by chatting with their 24/7 customer service. 

Verdict

Motusbank provides quick mortgage packages for customers who do not have the time to browse around for competitive mortgage plans in person. Using its online-only service, you can choose a mortgage plan with cheap rates and pay it off with a configurable payment schedule that fits your present financial circumstances.

CanWise Financial
CanWise Financial

Best for the cheapest mortgage interest rates

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  • ✅ Wide range of fixed and variable mortgages (both on everyday and limited basis)
  • ✅ Some of the lowest mortgage rates
  • ✅ Backed by CMHC
  • ✅ Variety of tools and resources (calculator for affordability/mortgage payment/mortgage insurance, etc.)
  • ✅ Widely available, with offices in seven provinces and the Northwest Territories.
  • ⛔️ No explanatory articles to educate buyers
  • ⛔️ No presence on BBB

CanWise is one of the most popular mortgage brokerages in Canada. This CMHC-approved lender has secured mortgage rates for $7.5 billion worth of deals. As a recognition of its excellent mortgage offers and services, CanWise was awarded the Mortgage Broker of the Year consecutively in 2018, 2019, and 2020.   

Types of Mortgages

CanWise offers two kinds of mortgages – fixed and variable. Let’s dive into the interest rates:

Fixed Mortgages
  • 1 Year Everyday 2.49% –  Limited 1.84%
  • 2 Year Everyday 2.29% – Limited 1.53%
  • 3 Year Everyday 2.19% – Limited 1.53%
  • 4 Year Everyday 2.39% – Limited 1.74%
  • 5 Year Everyday 2.49% – Limited 1.64%
  • 7 Year Everyday 3.09% – Limited 2.39%
  • 10 Year Everyday 3.49% – Limited 2.99%
Variable Mortgages
  • 3 Year Everyday 3.95% – Limited 2.45%
  • 5 Year Everyday 1.89% – Limited 0.98%
Home Equity Line of Credit(HELOC)
  • Everyday 4.45% – Limited 0.9%

Key Features

Here’s a quick review of the noteworthy perks of CanWise mortgages:

  • There’s bridge financing available if you are selling a house and purchasing another.
  • If you sell one home and buy another, you can transfer your current mortgage to the new home without penalties.
  • CanWise registers mortgage as a normal charge (rather than a collateral fee), which makes switching lenders easier in the future.
  • You are allowed to make extra lump sum payments each year, the total of which cannot exceed 20% of your initial mortgage principal.
  • You have the option of increasing your regular payment by up to 20% of the original payment amount.

Approval Process

To avail of the mortgage interest rates that CanWise offers as a Canadian citizen, you’ll have to apply for pre-approval by submitting the following information:

  • Income 
  • Credit score
  • Current assets and liabilities
  • The size of your intended down payment
Permanent Resident

If you have a good credit score and can make a down payment of 5% or more, you qualify for a regular mortgage, the same as a Canadian citizen.

If you have a 5% or more down payment but your credit score is weak, you may still qualify for the New to Canada Program offered by the three mortgage default insurance providers.

Not a Permanent Resident

You’re not a permanent resident yet, but you’ve submitted your application and also have a valid work permit, a good credit score, and a down payment of 5% or more, you qualify for a regular mortgage.

You’re not a permanent resident, but you have a 10% or more down payment (your credit score can be good/fair or weak), you qualify for the New to Canada Program.

Verdict

CanWise is a trusted mortgage brokerage with a huge national presence. It offers a vast array of services ranging from mortgages, renewal, and divorce financial assistance to investment plans. CanWise is especially popular because of its remarkably low rates and time-tested authenticity.

Meridian Credit Union
Meridian Credit Union

Best for innovative mortgage plans for various life stages

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  • ✅ Markedly lower featured mortgage interest rates
  • ✅ Great variety of mortgage types
  • ✅ Family and friends, construction, and hybrid mortgages
  • ✅ Skip-a-payment
  • ✅ Flexible repayment schedules
  • ✅. 3% cashback reward with some fixed and variable mortgages
  • ✅ 20% lump sum prepayment and 20% regular payment increase
  • ⛔️ Operates only in Ontario
  • ⛔️ Sub-par website performance

Meridian is the largest credit union in Ontario, entrusted with the management of $27.2 billion worth of assets. Meridian provides its members with a full range of financial products through a network of 89 branches across Ontario and is a member of the Financial Services Regulatory Authority of Ontario (FSRA).

Meridian offers a variety of accounts, including chequing and savings accounts, mortgages, investing, credit cards, personal loans, insurance, and more.

Types of Mortgages

Meridian works with the latest Canadian mortgage rates. Let’s take a look at them:

Fixed Rate Mortgages
  • 6 Month Convertible 3.89%
  • 1 Year Closed 3.09%
  • 2 Year Closed 3.29% (Featured 2.09%)
  • 3 Year Closed 3.69% (Featured 2.19%)
  • 4 Year Closed 3.89%
  • 5 Year Closed 4.79% (Featured 2.24%)
  • 5 Year Closed High Ratio 1.99% 
  • 7 Year Closed 5.45% (Featured 2.99%)
  • 10 Year Closed 5.95% (Featured 3.29%)
Open Fixed Rate Mortgages
  • 1 Year Open 6.30%
Variable-rate Mortgages
  • 5 Year Open 4.45%
  • 5 Year Closed 1.55%
  • 5 Year Closed High Ratio 1.45%

Key Features

Meridian brings a bunch of innovative mortgage packages to buyers. Some of their standout features are:

Hybrid Mortgages

A unique offering of Meridian, hybrid mortgages allow lenders to borrow up to 80% of the property price. The loan portion makes up a maximum of 60%, and the conventional mortgage portion makes up a minimum of 20%. To apply for this type of mortgage, you will need a down payment of at least 20%.

Construction Mortgages

If you’re building a new house or renovating, you can get your hands on some of the cheapest mortgage rates at Meridian. The mortgage is split into advances that you get in stages throughout the construction or renovation of your home. Monthly payments are interest-only until the end of construction. After construction, your payments will be a blend of principal and interest.

Approval Process

To avail of Meridian mortgages, you must be pre-approved, with a property in sight. 

When you apply for a mortgage, your lender will examine your financial situation as well as the property you wish to purchase. You and your partner reach an agreement on the specifics of your mortgage.

If you’re approved for the mortgage you want, you need to gather and submit the following documents to finalize everything:

  • Valid identification
  • Confirmation of income
  • Bank information
  • Lawyer information
  • Copy of the Purchase Agreement
  • Copy of the MLS listing

Verdict

Meridian has a robust clientele and offers some of the most attractive mortgage rates available in Canada. 20/20 repayment options and cashback rewards make payment schedules remarkably flexible and appealing to buyers. Additionally, several innovative mortgage products that are unique to Meridian help solidify its presence in the Canadian mortgage market. 

Tangerine
Tangerine

Best for fixed mortgage rates with flexible prepayment privileges

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  • ✅ Competitive fixed mortgage rates
  • ✅ Seamless digital services
  • ✅ 25/25 prepayment privileges
  • ✅ Secure holding period of 120 days for most mortgages
  • ✅ Portable mortgages
  • ✅ Explanatory articles and guides
  • ⛔️ Variable-rate mortgages for 5 years only
  • ⛔️ Not available to those with poor credit scores or prior bankruptcies

Tangerine is Canada’s most-loved online bank and also offers some of the lowest mortgage interest rates. Launched as ING DIRECT in 1997, Tangerine sought to address the problematic areas of traditional banking – low interest, high banking fees, and service charges. Today, Tangerine poses as the one-stop solution for a host of banking services, including mortgages and Home Equity Line of Credit(HELOC), GICs, investment funds, and savings and chequing accounts.

Types of Mortgages

Tangerine offers variable and fixed mortgages. Let’s see what’s on offer:

Variable-rate Mortgage 
  • 1.35%
Fixed-rate Mortgages
  • 1 Year Fixed Mortgage 2.79%
  • 2 Year Fixed Mortgage 1.78%
  • 3 Year Fixed Mortgage 1.89%
  • 4 Year Fixed Mortgage 2.04%
  • 5 Year Fixed Mortgage 2.14%
  • 7 Year Fixed Mortgage 2.64%
  • 10 Year Fixed Mortgage 3.09%

At Tangerine, annual interest rates are calculated semi-annually and not in advance. 

Other than these rates, you’ll find a variety of tools and resources like:

  • Mortgage payment calculator
  • Rent translator
  • Mortgage prepayment FAQs
  • Collateral charges guide

Key Features

Besides offering some of the top mortgage rates, Tangerine strives to provide home-buyers with peace of mind by offering a secure lock-in period and flexible prepayment options. 

Mortgage Rate Hold

Fixed-rate mortgages at Tangerine come with a 120-day hold, during which time you can get your application, documents, and funds ready. 

However, if you’re going with the 5-year variable rate, you’ll get the difference between the Tangerine Prime Rate and the quoted rate for the guarantee period. Though the Prime rate can change at any time, the difference between that and the offered rate will remain constant during the hold period. 

Great Prepayment Options

You can make lump-sum prepayments of up to 25% of your original mortgage amount each year. Additionally, you can raise your regular mortgage repayments by up to 25% of your original mortgage payment. This can be done on any payment date.

Support from Mortgage Agents

On signing up with Tangerine, you’ll be assigned a Mortgage account manager for a     step-by-step guide.

Portability

If you happen to move, you can take your mortgage with you at your present rate, term, and loan amount without penalty.

Approval Process

You’ll be eligible for a Tangerine mortgage if:

  • You’re a Canadian resident
  • You have been employed full-time for at least 3 months
  • You have been self-employed for at least 2 years
  • You’re not a prior bankrupt
  • You have a minimum credit score of 620
  • You’re applying for a mortgage loan amount of $50,000 or more

The application process is quite straightforward. Once you apply online, you’ll be assigned a mortgage agent manager to walk you through it.   

Verdict

If you’re looking for the most attractive Canadian fixed mortgage rates with a guaranteed lock period of 120 days, head to Tangerine. It’s a secure digital banking platform that provides you with prepayment privileges as high as 25/25. You’ll also get guidance through dedicated agents. It’s safe to say Tangerine is one of the leading names on the list of online mortgage lenders in Canada that stand out. 

Want to find out more? Check out our comprehensive Tangerine review.

Canadian Mortgage Rates Compared

Simply put, a mortgage is a loan from a bank or a mortgage lender to assist you in purchasing a home. The residence serves as a form of security for the money you’re borrowing.

We’re here to help you with the mortgage-related jargon like mortgage types, terms, amortization period and more. Read our guide to stay in the know about the top-notch Canadian mortgage lenders:

The Initial Steps – Pre-approval and Down Payment

The Pre-approval Process

There are a few things you need to know and do before you can get your dream home. Before you go looking for a property to purchase, it’s wise to get pre-approved by a bank so that you get an idea of how much you can afford. A pre-approval is a standard step in the mortgage process, which also protects buyers from risks. 

So, what does a pre-approval get you? Let’s take a look:

  • Knowledge of the maximum mortgage amount you’re eligible for
  • A lock period of 60 to 130 days for the mortgage interest rates that you got approved for

Next, you’re probably wondering where to get pre-approved.  

Both mortgage lenders (banks, credit unions, loan companies etc.) and mortgage brokers offer pre-approvals. 

A useful tip: 

You might want to opt for online mortgage rates comparison to gauge the market before getting pre-approved. Once you get a fair idea of what’s out there, you’ll find it easier to shop around for the best deals.

You’ll probably be paying your mortgage till long after you move in, so another great tool to know about the best rates would be a mortgage calculator.

Once you get pre-approved for a mortgage, your agreed-upon rate will be locked in for a period of 60 to 130 days, depending on the bank. Now your house-hunting can begin in earnest!

Down Payment on Mortgages

Property prices are steep, to say the least. Most of us don’t have the entire capital to finance our dream homes. Hence monthly mortgages are the go-to solution. But before you can start paying mortgages, you’re required to pay a portion of the price, called a down payment

The amount you pay down is deducted from the property price, so the larger your down payment, the smaller your mortgage amount. If you put down less than 20% of the property price, you will need to pay mortgage insurance. 

What we mean is this:

You might be on the lookout for the best Canadian mortgage rates with low down payment options but keep in mind that these come with an added charge – mortgage loan insurance. 

New and resale property insured mortgages are now available from most lenders. For this reason, the carrying costs of a low down payment mortgage are higher than those of a typical mortgage since they include the insurance premium.

Key takeaway:

It’s to your advantage to put down as much money as you can because interest costs for a smaller mortgage are lower, adding up to significant savings over the long run.

Fixed-Rate Mortgages vs. Variable Rate Mortgages

With fixed-rate mortgages, the interest remains constant throughout the mortgage term. In contrast, variable or adjustable-rate mortgages (ARM) have rates that fluctuate throughout the term. 

Fixed mortgage rates most commonly run for 5 years, and the Government of Canada determines these rates by way of its bond yields. The interest rates for variable mortgages are determined by the Bank of Canada’s lenders’ prime rates. Variable mortgages are given at a prime rate plus or minus a discount or a premium. 

The Bank of Canada alters the prime rate based on the performance of the market. The inflation rate is shaped by factors such as unemployment, export, and manufacturing values.

Open vs. Closed Mortgages

An open mortgage is one in which you can pay off your mortgage amount either by increasing the number of repayments or by paying a lump sum. Closed mortgages either don’t allow prepayment or come with prepayment penalties. If you make a mortgage rate comparison, you’ll see that open mortgages come with higher interest rates while closed mortgages have low rates. 

Another noteworthy difference: 

Closed mortgages come with some of the best variable mortgage rates, and the prepayment penalties are lower than closed fixed-rate mortgages. That’s partly why closed mortgages are the popular choice in Canada. 

So, who opts for open mortgages? 

Buyers who take out mortgage loans for a short period of time and expect to pay them back expediently tend to choose open mortgages. These early payments can be sourced from: 

  • A substantial income hike
  • Proceeds from the sale of a house
  • An inheritance

Factors Affecting Your Mortgage Rate

At the end of the day, a mortgage is just like any other product you’d buy off the market. So, you’ll be looking for low mortgage rates while the lender will try to push for higher rates while also minimizing their risk. A blend of economic and personal factors affect Canadian mortgage lender rates

The Global and Canadian Economy

GDP and unemployment rate are two economic growth indicators that have a bearing on mortgage rates. Consumer spending increases as the economy grows, and that includes consumers seeking mortgage loans to purchase homes. It’s a fact that financial markets around the world are linked. 

As a result, mortgage rates in Canada fluctuate based on what happens in other parts of the world. However, the United States is where many Canadian banks borrow money.

Your Credit Score

The lender’s biggest concern is that you won’t pay back the loan. A high credit score can help alleviate this concern, as it shows the lender that you have a good track record of repaying your debts on time. Because of this, your interest rate may be lower than that of people with a lower credit score. If a borrower has an average credit score of 670 or 680 and no late or delinquent payments, a lender is likely to approve the loan. 

Prepayment Risk 

If you pay off your mortgage early, the lender is at risk of losing money. This is called prepayment risk. They can’t make as much money off of the money they’ve raised because mortgage interest rates have fallen since the term began. This means the interest rate on an open loan will be higher than on a closed one, which limits how much you can pay off early.

Banks vs. Mortgage Brokers

Back in the day, banks used to be the only destinations for mortgages. But today, the housing market offers a wide array of mortgage brokers and lenders, both digital and physical. Here, we’ve listed a few pros and cons of banks and brokers for securing mortgages so that you can decide which provider is right for you:

Pros of Mortgage Brokers

  • Brokers will do most of the work on your behalf and negotiate the most affordable mortgage rates. 
  • Brokers generally offer their services for free if you have a decent credit score. 
  • Brokers have access to a broader range of lenders than you’d expect to get if you shop on your own. 
  • Many brokers have gone digital, and you can view your application process online and get customer care 24/7. 

Cons of Mortgage Brokers

  • Home-shoppers who still prefer brick-and-mortar mortgage lenders may not feel entirely comfortable with brokers.
  • Some lenders don’t agree to work with brokers. So, if you have a specific lender in mind, it’s best to check that. 

Pros of Banks 

  • If you prefer to have all your transactions in the same place, banks are a convenient choice. 
  • Banks often offer a combination of services with added perks like a free safety deposit box, waiving of banking fees, etc. 
  • Banks are the safest and most stable option. 

Cons of Banks

  • Banks don’t offer too much space for negotiation or product customization. 
  • Banking is time-consuming as you’ll have to do your own research.
  • Credit bureaus don’t always combine multiple mortgage-related credit checks into one investigation. If that’s the case, shopping around for a mortgage at banks may harm your credit score.

Canada’s Best Mortgage Rates in 2021 in a Nutshell

Citadel Mortgages – Best for conventional broker experiences with cheap interest rates
DUCA – Best for those with a bad credit score looking for customizable mortgages
Equitable Bank – Best for reverse mortgages with flexible prepayment options
Motusbank – Best for online mortgage solutions and joint ownership plans
CanWise Financial – Best for the cheapest mortgage interest rates
Meridian Credit Union  – Best for innovative mortgage plans for various life stages
Tangerine – Best for fixed mortgage rates with flexible prepayment privileges

How to Choose the Best Mortgage in Canada

If you’re serious about buying a house, then a thorough knowledge of mortgage rates in Canada is only half the battle won. Here’s a step-by-step guide on how to find the best mortgage:

1. Choose the right time to buy a house

The mortgage market fluctuates multiple times a day. If you’re looking to make a purchase, you should keep an eye on the economy. Generally speaking, the daily news is the way to review the market. For instance, if the economy needs to be revamped, the Bank of Canada may permit low-interest rates on mortgages to encourage purchases. So, being in touch with Canadian and global markets will be a fair pointer about when to start shopping for a property. 

2. Find out how much you can afford

So you’re in the market, looking for a home. If your income is stable, you’ll feel ready to make the commitment. But stop right there:

Heading to lenders right away won’t cut it.

You must first determine how much you can afford. You must also assure your lender that you can keep paying off your mortgage to term. 

Take a look at the following things to get an idea:

Credit score 

Review your credit score and focus on increasing it for at least several months before applying for a mortgage. Clearing credit card balances, making on-time payments, and not taking out loans or opening several credit cards will help you earn or keep a good credit score. The lowest mortgage rates in Canada come to those with a credit score of 760 or higher

Debt ratio 

Most lenders use the debt-to-interest ratio to determine how much you can afford. 

The formula goes like this: Total debt / Gross income = Debt-to-income ratio.

Your monthly mortgage payments (principal and interest, taxes, and insurance) should not exceed 28% of your pretax income, and your total monthly debt obligation should not exceed 36% of your pretax income.

You can calculate your debt-to-income ratio here

Down payment

As we said before, it’s in your benefit to put down as much money as possible because interest rates for a smaller mortgage are lower, which adds up to big savings in the long term. With an inadequate down payment — and a slight dip in the real estate market — you may wind up with a large loan and a home worth less than you owe.

3. Consider the length of your term

Although 30 years’ amortization is the standard, many lenders also offer 10 or 15-year loans. If you’re economically capable of choosing a larger payback amount over a shorter term, you’ll be eligible for markedly reduced interest rates altogether and cheaper mortgage rates. 

4. Choose the right type of mortgage rates

As you can clearly see if you’ve made it this far, there’s no shortage of players in the field. Canadian mortgage lenders with attractive rates will advertise themselves, but you must grab the rate that applies only to you. 

For this, decide whether you’ll be staying in the property will be long-term or only briefly. 

Here’s why:

If you envision staying on for life, then fixed-rate mortgages are the best option. 

But if you’re looking to move within the next 5 years, refinance, or pay off your loan before term, then adjustable-rate mortgages are worth the fluctuating rates. 

5. Compare mortgage rates

Don’t settle on the very first deal you’re offered. Shop around for better rates. Here are the factors on which to base your choice of the best mortgage lenders in Canada:

Mortgage interest rates 

Prices fluctuate constantly so make sure you have the correct lender in place before locking in a rate and finalizing your application. If you’re interested in getting a lower interest rate, ask about points. Check the price and whether or not you need them.

Associated fees

With a mortgage loan, there are several charges. It’s not all that easy to understand. In some cases, lenders will disclose the costs separately. In others, they will list them all together. 

Include application fees, underwriting costs, and any other costs that will be added at the end of the transaction in your inquiries. Compare lenders and try to bargain as many fees as you can with each one.

6. Review all the paperwork

Closing a real estate deal requires a lot of paperwork. Despite the fact that there is a stack of documents filled with legal jargon and complex legal concepts, you should read them all carefully.

Ask a real estate attorney if you’re unsure about anything you’ve read. Any legal jargon will be easier to understand with the help of your agent. The right Canadian mortgage rate for your needs should be accurate, and all other terms should be properly stated. 

Wrap Up

Buying a home can be an exciting yet daunting task. Since it’s probably going to be your biggest asset, you must always stay in the know about the latest mortgage interest rates, factors affecting those rates, and prepayment penalties.

Having a sound financial plan often helps you save up just enough to put down a sizable amount towards your home. Then, you can confidently shop around for the best rates. 

We’ve gone over some of the most affordable mortgage rates, the best mortgage rates by province, and some lucrative mortgage deals that many banks and brokerages are coming up with to appeal to a wider audience. Whether it’s joint ownership or payment in stages, we hope you find the right offer to help you move into your dream home. 

FAQ

What is a mortgage rate?

The interest a mortgage borrower will pay on money borrowed against a mortgage is referred to as the mortgage rate. When a buyer borrows money from a mortgage lender, they must pay interest on the amount borrowed as a fee for using the funds.

Mortgage interest rates determine the amount of the fees. In a fixed-rate mortgage, the rate is fixed; in an adjustable-rate mortgage or variable rate mortgage, the rate is variable. The mortgage rate will have a significant impact on the amount of money the borrower will pay to the lender.

Which bank has the best mortgage rates in Canada?

Motusbank, Equitable Bank, and Tangerine lend out some of the best Canadian mortgage rates today.

What are the current mortgage rates in Canada?

The latest rates for five-year fixed mortgages in Canada are 1.69% by CanWise Financial, 1.84% by DUCA, and so on. We’ve listed them all in our reviews.

What are prepayment options?

Some mortgages still charge prepayment penalties. To avoid that, you can use prepayment privileges. It is the amount you can pay on top of your regular payments.

Check with your lender to find out if they allow prepayment privilege, when you can pre-pay, and the maximum and minimum limits of these prepayment options.

What is the best 5-year mortgage rate in Canada?

For a home value of $350,000 and an amortization period of 25 years, the best mortgage rates in Canada for 5 years fixed mortgages start as low as 1.54%.