Factors that Influence Best Mortgage Rates in Toronto




Whether you’re new to mortgage market or an old player, you can’t know everything at once. There are certain factors that influence your chances of getting best mortgage rates.
Living in the busy economic and financial hub as Toronto, one faces the problem of affordable housing. The listings are many but prices are high as compared to the neighboring cities in the same province. Knowing how mortgage rates fluctuate and which the best way to go is, you can procure the best mortgage rates in Toronto and get yourself your dream home in no time.
Mortgage rates depend upon macro and micro factors. Macro factors can be described as the economy of a country and monetary policies adopted by the apex banks. Micro factors are the factors that pertain to an individual like credit score etc. Let’s take these one by one.

Macro Factors


  • The first factor is the level of the economic growth which is indicated by GDP and employment rate of Canada as a whole. Higher economic growth leads to a rise in mortgage rates as a larger population falls in higher income group. Spending is encouraged and mortgage market booms with an increase in mortgage rates. Vice versa is true in case of decline in economic growth.
  • Monetary policy adopted by the Bank of Canada just recently gave a demonstration by increasing the Prime Rate which in turn increased the variable mortgage rates. The monetary policy depends on the various objectives that are to be achieved such as control of inflation-deflation cycle and much more.

Micro Factors


  • On an individual basis, your credit score determines the mortgage rates you’ll get to a greater extent. Therefore, it’s imperative to maintain a good credit score. Credit score is calculated differently by different lending institutions but they all take payment history, credit utilization, and account handling into consideration. Avoid opening too many new accounts and make timely loan repayment towards your previous mortgages and credit card statements. Lenders look for credibility. Write it out for them in neon.
  • The loan amount you opt for also shapes your mortgage rates. Too high or too low an amount can get you high mortgage rates.
  • The down payment also impacts mortgage rates. If you put down the expected 20% of loan amount, you come under the low risk borrowers and offered low mortgage rates.
  • Loan term also influences mortgage rates. Taking into account inflation, long term mortgage rates are comparatively higher than short term mortgage rates.
  • Fixed rate mortgages are preferred to adjustable mortgage rates as they are independent of market forces and monetary policy changes. But that also implies that these are higher than adjustable mortgage rates from the start. You can take into account the loan term and loan amount before deciding upon whether you want fixed or adjustable mortgage rates.
These are the key factors that influence mortgage rates. For best mortgage rates in Toronto, trust the Mortgage Division, the best in Toronto.    



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