Learn More About Mortgage Rates In Ottawa
Current Ottawa Rates
If you are considering buying a home in Ottawa, now might be the best time to become a homeowner, as the mortgage rates in Ottawa are currently low. But the low rates will not last forever.
A home in Ottawa is a fantastic asset as the city is the capital and fourth largest city in Canada, and it hosts many foreign embassies and federal government offices. Ottawa is also a favourite destination for tourists and is one of the most popular places for world-class events and conferences. One of the star attractions of Ottawa is the annual tulip festival which gets over 500,000 visitors.
Ottawa being one of the best places to live in, it has a thriving housing economy and a highly competitive mortgage broker market which provides plenty rate options for the prospective Ottawa homeowner.
Types Of Mortgage Rates
There are two broad types of mortgage rates available to intending homeowners. You can either go for the fixed rate mortgage or choose the variable rate mortgage.
Fixed Mortgage Rates
A fixed rate mortgage is a type of mortgage in which the borrower’s monthly repayments are fixed for the term of the mortgage. Mortgage terms can range from 6-months, 1-year, 2-year, 3-year, 4-year, 5-year, 10-year mortgage terms or more. Currently, the aggregated fixed rates for Ottawa are 2.64%, 2.79%, 2.39%, 2.89%, and 2.83% for 1, 2, 3, 4, and 5-year terms respectively. If you took a fixed rate mortgage, you would pay a constant amount of money for the term of that mortgage.
Variable Mortgage Rates
In a variable rate mortgage, the borrower pays according to the prime rate of the lender. Even though variable rates are usually more affordable than fixed rates, the borrower is at the mercy of market forces, as variable rates fluctuate with the rate of the lender. If the lender’s prime rates go up, your payment goes up, and vice versa. The aggregated variable rates for Ottawa include 2.95% for the 3-year variable rate and 1.99% for 5-year variable rate, with Butler Mortgage offering the lowest rate of 1.97% for 5-year variable rates.
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Featured Rates
FIXED
| Lender | Rate | Term | |
![Mortgage Lendwise Rate](https://certifiedmortgagebroker.com/wp-content/uploads/Mortgage_lendwise_logo.png"){kind=logo} | Lendwise | 1.79% | 5-Year |
 | First National Financial | 1.89% | 4-Year |
 | RMG Mortgages | 1.89% | 3-Year |
 | Street Capital Bank | 1.89% | 2-Year |
![Mortgage TD Bank Rate](https://certifiedmortgagebroker.com/wp-content/uploads/Mortgage_TD_Bank_Logo.png"){kind=logo} | TD Bank | 1.89% | 1-Year |
VARIABLE
| Term | Rate |
| 5-Year variable | 1.7%(prime - 0.35%) |
| 3-Year variable | 2.6%(prime + 0.15%) |
HELOC
| Type | Rate |
| HELOC | 4.2%(prime +0.25%) |
OTHER
| Type | Rate |
| Line of Credit | Starting at 3.00% |
| Equity Loans | Starting at 5.99% |
| Private Mortgages | Starting at 5.99% |
Compare Ottawa Mortgage Rate Types
Before you settle for any of these rates, it is essential to speak with an Ottawa mortgage broker who will show you the advantages and disadvantages of both options. Meanwhile, here are a few tips on the merits and demerits of fixed and variable mortgage rates
Fixed Mortgage Rates
Pros Of Fixed Rates
- Fixed rate mortgages offer security against fluctuations of the interest rates. If the rates go up, you will still pay the set amount for your regular payments.
- It lets you plan your finances without the fear of any sudden hikes in the rates.
- It also provides stability.
Cons Of Fixed Rates
- If the rates drop, you still have to pay the agreed rates in your contract.
- It can lead to loss of huge sums of money when the difference with variable rates is very wide.
- Statistically, fixed rates are more expensive than variable rates.
Variable Mortgage Rates
Pros of Variable Rates
- Over the years, variable rates are known to be cheaper compared to fixed rates.
Cons of Variable rates
- Variable rates are volatile, and rise and fall with the prime rates of the lender. You can start your term with a low rate, and end up with a higher mortgage rate at the middle of the term.
- It can increase your financial obligations, and lead to instability and difficult budgeting, especially for young people who have a limited source of income.
According to available data, 66 percent of people who take mortgages in Canada opt for fixed-rate mortgages, while 29 percent choose variable rates. Older people tend to pick the variable rates, and the fixed rates are favoured by young homeowners. Talk to an Ottawa mortgage broker for more information about the best rates in the city, as well as other essential areas of a mortgage. While interest rates are a critical foundation for mortgages, you also need to understand the other parts of the deal to make the best decisions.
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