Canadian Mortgage Rates2021-10-07T15:07:10-07:00

With Canadian Mortgage Rates this low….

We offer the lowest Canadian Mortgage Rates available.  How do we do it? It’s quite simple really.  Due the sheer volume of mortgage transactions we send to banks and lenders in Canada, the banks provide us discounted rates.  Thus, we pass on these discounted mortgage rates to you!  It’s a win-win for everyone involved.

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Be cautious searching for the lowest mortgage rates online. Learn about mortgage products that could cost you more money in the long term. We will help save you thousands in your home ownership journey.

Reliable Canadian Mortgage Rates

Canadian Mortgage rates are at the lowest they’ve been in years.  Contact us today to get the best mortgage rates and tips for saving thousands of dollars.  Whether you are purchasing a new home,  looking to renew your mortgage or transfer it, refinance to consolidate or renovate, our experience and knowledge will help you avoid overpaying in interest costs, or penalty formulas that banks do not advertise clearly to you.

Check out our weekly blog for more money-saving tips and tools from Canada’s #1 site for mortgage rates. For peace of mind before – and after – you buy, choose Pragmatic Lending.

Researching Canadian Mortgage Rates

The internet has become a powerful and reliable tool to research Canadian mortgage rates and lender options.  But it requires a professional to read and understand the fine print of each lenders product offering.  Why spend hours in researching Canadian mortgage rate options, only to discover afterwards that the Interest Rate Differential calculation is extreme, or there is a Bona-Fide Sales Clause, or another bank offered a lower rate and better pre-payment privileges.  As your Kelowna Mortgage Broker, our consultation and representation is free of charge!  How is that possible you may ask?  It’s very simple. We are paid directly by the banks a commission for representing you.  Think of it this way:  If you walked in to a local bank today, a banking officer will work on your application who also earns a commission.  Ask yourself:  Why would you work with a banking officer who represents one Bank,  when you could work with a Broker who represents you; and works to get you the best product at whichever lender if the best fit?

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Interest Rate Differential (Mortgage IRD) Explanation2021-08-03T19:24:33-07:00

Interest Rate Differential (Mortgage IRD). What is it?

The interest rate differential is calculation method lenders will use to break your mortgage early if needed. Simply put, depending on how far you are in the term of your product, they will equate the “Interest Rate Difference” using the remaining balance on the term compared to current rates and the balance of interest owing. Be careful! Lenders are very crafty in their calculation methods and rarely disclose properly upfront how much it will cost you to break your mortgage. Many “low rate” products have the worst IRD calculation, costing you thousands! It is important to consult our Mortgage Broker’s to provide you the BEST lender with the BEST IRD formula possible for Fixed rate Mortgages.

Watch this video for a basic understanding.

What happens when a Fixed rate mortgage is paid out before the term ends?

When a Borrower pays out their mortgage during the term, the Lender no longer receives interest on the mortgage, however the expenses related to the mortgage (the “Lender’s Cost”) still exist. If the interest rate available to re-lend funds for the remaining term of the mortgage is less than the Mortgage Interest Rate, there may be an IRD penalty due.

Prepayment penalties occur when a borrower pays more towards principal than what is allowed under the prepayment privileges of their mortgage contract.

If a borrower pays down their mortgage beyond the prepayment privilege, the lender is owed compensation (penalty) by the borrower. In some circumstances that compensation is an Interest Rate Differential (IRD).

IRD is a formula typically composed of three components

1. The difference between two interest rates (“Re-Lending Rate Variance”); typically, the Mortgage Interest Rate and the interest rate that is available for the remaining term, and:

2. The balance that is subject to the penalty, and:

3. The time to maturity

A simplified expression of the IRD is:

IRD = Principal Amount (A) x Re-Lending Rate Variance (B) x Time to maturity (C)

Since the principal amount (A) is paid down over time and the time to maturity (C) is also reducing as time passes during the term, these two elements have a reducing impact on the IRD.

When the IRD increases from one day to the next it is because the “Re-Lending Rate Variance” has increased. Increases in the Re- Lending Rate Variance are caused by the rate available to re-lend the funds for the remaining term having been reduced. This is a result of either:

1. A reduction in the current interest rate for the remaining term, or

2. The ‘remaining term’ used in the calculation having changed to a term with a lower interest rate because of the passage of time (was using the 3-year rate and now using the 2-year rate with a lower rate).

A small change in the current interest rate can have a large impact on the Re-Lending Rate Variance, and thus a large impact on the IRD penalty.

Simply put, if interest rates go up, your penalty will be smaller, if they go down your penalty will larger

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