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Buying a home is an experience you’ll never forget. Whether you’re a first-time homebuyer or you’re a veteran buyer, you’ll have to find a lender that can meet your needs and wants. First, you’re going to need a mortgage. And second, you’re going to want a mortgage lender that offers you a better-than-average mortgage rate in Abbotsford, B.C., a city about 70 kilometres east of Vancouver that sits near the Canada–U.S. border.
You’ve come to the right place if you’re looking for a great interest rate. LowestRates.ca finds the best mortgage rates for homes in Abbotsford from Canada’s top brokers and banks. Best of all, there’s no cost to compare mortgage rates in Abbotsford or across Canada. Just tell us whether you’re buying a home, renewing or refinancing and click the “Get Started” button above to start comparing rates from 75+ banks and brokers.
When you buy a home, there are two different types of mortgages based on the amount of your down payment.
The first is called a conventional mortgage. With this type of mortgage, you need to make a down payment of 20% or more of the purchase price.
The second is called a high-ratio mortgage. With this type of mortgage, your down payment is less than 20% but more than 5%. If you want a high-ratio mortgage, you’re required to buy mortgage default insurance from the Canada Mortgage and Housing Corporation (CMHC) or private insurance companies Sagen or Canada Guaranty. Mortgage default insurance is also commonly known as “CMHC insurance.”
|Date||Average Conventional Rate||Average High Ratio Rate|
Last Updated: September 1, 2021
When you get a mortgage, you have the option of getting a fixed rate or a variable rate. This is important when looking at the lowest mortgage rates in Abbotsford.
The interest rate on a fixed rate mortgage will remain the same for the entire term. Your payments will also stay the same and the amount of interest you pay will slowly decrease each time you make a payment. This type of mortgage is best suited for you if you’re worried about the Bank of Canada raising interest rates.
The interest rate on a variable rate mortgage can change over the life of the term. In most cases, your payment will stay the same but the amount of interest you pay will increase as interest rates rise.
Keep reading to find out the factors that determine if you can get the best variable or fixed mortgage rates in Abbotsford.
Last Updated: September 1, 2021
While you may be able to get the best mortgage lenders Abbotsford, that doesn’t mean you’ll automatically get the lowest rate. Mortgage interest rates in Abbotsford and across Canada are determined based on a number of factors.
Down payment: Typically, you’ll get a lower rate if your down payment is less than 20%. That’s because you must also buy mortgage default insurance, which protects the lender in the event you’re unable to make your regular payments. When you make a down payment of more than 20%, you don’t have to buy mortgage default insurance and the lender is taking on more risk and charges a slightly higher rate.
The rules regarding down payments are set by the federal government. These are the required minimums:
Credit score: Mortgage companies in Abbotsford and across the country also look at your credit score (which is between 300 and 900) to calculate their mortgage rates. Abbotsford lenders (and all lenders) look at your score to determine what kind of borrower you are. If you have a low score, you’re considered to be a risky borrower. If you have a high score, you’re considered to be a more trustworthy borrower. You’ll also be more likely to get one of today’s best mortgage rates in Abbotsford if your score is excellent (760 or higher).
Debt service ratios: To qualify for a mortgage loan, lenders in Abbotsford will also look at your debt service ratios. The first ratio they look at is the gross debt service (GDS) ratio. This provides a snapshot of what you’re spending on housing. This is made up of your mortgage payments, property taxes, heating costs, and condo fees (if you’re buying a condo) divided by your salary before tax. Ideally, your household GDS ratio should be under 35%, but some lenders will allow it to be as high as 39%.
The other ratio lenders review is your total debt service (TDS) ratio. This includes both your housing costs and debt payments. The TDS is your GDS plus any debt payments and divided by your pre-tax income. Lenders like a household’s TDS to be lower than 42%, but some will allow it to be 44%.
Employment and income: And the last thing that lenders will look at is your annual income, how long you’ve been at your current company, and if you’re a full-time, part-time, or contract worker. Self-employed workers will be required to provide some additional documentation, such as bank statements, copies of your tax returns, and proof that all your taxes have been paid.
Whether you’re buying a house or a condo, mortgage rates in Abbotsford won’t vary depending on the type of property you buy.
The size of your mortgage will depend on the size of your down payment, the type of property you buy (detached homes are typically more expensive than condos or townhomes, but it will also depend upon where in the city you decide to live), and whether or not you secure the cheapest mortgage rates in Abbotsford.
In June 2021, the Fraser Valley Real Estate Board noted that the benchmark price of a home in Abbotsford was $806,400. That’s an increase of 28.6% over the last 12 months.
If you buy a home that costs the same as the benchmark price and you want a conventional mortgage, you’ll have to make a down payment of at least 20% ($161,280). That means you’ll have a mortgage of as much as $645,120.
But if you don’t have 20% saved, you’ll have to get a high-ratio mortgage and mortgage default insurance. If you make a down payment of 5% ($40,320), your mortgage will be $766,080. However, the mortgage default insurance premium of 4% (it’s lower if you make a down payment of at least 10% or 15%) will typically be added to the mortgage. If you add the premium to the amount you borrow, your mortgage will end up being $796,723.20.
You don’t need to do this math in your head — use our mortgage payment calculator to find out exactly how much your mortgage payments will be.
Over the last year, the cost of real estate has risen significantly in Abbotsford and the rest of the Fraser Valley. According to the Fraser Valley Real Estate Board, the benchmark price of a detached home was $1,140,100 in June 2021. That’s a 38.8% increase compared to June 2020.
Prices also rose for other types of homes. The benchmark price of a townhome was $575,900 in June 2021 — a 26.3% increase over 12 months. And the benchmark price of apartments/condos increased 17.4% to $378,100 in June 2021.
Unsure if you can buy a home in this city? If you type the lowest mortgage interest rate in Abbotsford into a mortgage affordability calculator, you’ll get a better idea of what you can afford.
Most new homebuyers are unaware of the number of additional costs that come with purchasing a home. These extra expenses are called closing costs and they can be up to 4% of the purchase price.
The most common closing costs are:
Another common closing cost is a land transfer tax. In B.C., it’s called the general property transfer tax. The rate is:
If the property is worth more than $3 million, an additional 2% tax will be applied.
To find out how much you’ll pay in land transfer taxes on your Abbotsford home, use our land transfer tax calculator.
There’s also the B.C. foreign buyers tax, which is an additional property transfer tax. This tax is only charged to foreign nationals, foreign corporations, or taxable trustees. The tax is an additional 20% on your share of the fair market value of the property. For example, if you’re buying half of the property with someone who isn’t a foreign buyer, then you only pay tax on your 50% share.
There’s a lot of jargon used when discussing mortgages, such as a mortgage term and an amortization period.
The mortgage term is the amount of time your contract lasts. When the term ends, you can renew the contract with the remaining balance at a new rate with the same lender or you can find a new lender. The most popular term is for five years, but terms of six months to 10 years are also available.
The amortization period is the length of time you have to pay off the entire mortgage balance. The most popular amortization period is 25 years. If you have a high-ratio mortgage, you’re only allowed to get an amortization of 25 years or less. If you have a conventional mortgage, some lenders will allow your amortization period to be as long as 35 years.
When you do a mortgage rates comparison of Abbotsford lenders, you may see a huge difference between open and closed mortgage rates.
Closed mortgage rates are usually lower than open mortgages. The reason? Closed mortgages come with a number of restrictions, such as costs to break your mortgage as well as a limited number of additional payments and a maximum percentage you’re allowed to pay annually.
Open mortgage rates are higher than closed mortgages because they’re more flexible and there are fewer restrictions. If you want to make an extra payment every month without having to pay a penalty, pay off a large portion of the mortgage anytime, or pay off the remaining amount you owe whenever you want, you’re usually allowed to do so when you have an open mortgage.
It’s no surprise that living in Abbotsford is less expensive than most major cities, but prices in the Fraser Valley region — and many other parts of the country — have soared over the past year due to strong demand from buyers.
The benchmark price for a home in Abbotsford was $806,400 in June 2021. That’s lower than Greater Vancouver ($1,175,100) and Greater Toronto ($1,050,300), but higher than Montreal ($498,000) and Calgary ($445,000).
Commuting in Abbotsford can actually be quite long for some residents: 11.6% of them spend 60 minutes or more getting to work every day. That’s lower than Barrie (18%) and Oshawa (17.3%) — both of which are outside of Toronto — but higher than Toronto (11.1%), Vancouver (7.7%), Montreal (7.2%), and Calgary (2.9%).
The longer the commute, the more likely you’re going to have to spend on gas if you’re driving. Auto insurance rates in B.C. are the highest in the country. In 2020, the average annual insurance premiums were $1,832, followed by Ontario ($1,528), Alberta ($1,316), and Saskatchewan ($1,235).
Having a great rate is important, but there are other factors that can increase your savings:
Prepayment privileges: Many lenders will allow you to make additional payments on top of your regular mortgage payments. The amount will vary by lender, but it’s important to have this option if you want to pay off your mortgage early and save thousands of dollars in interest payments.
Penalties: There’s often a penalty if you need to break your mortgage or if you make more additional payments than you’re allowed. Breaking your mortgage can cost thousands or even tens of thousands of dollars. That’s why you should find out what the penalties are before signing a mortgage contract.
Portability: Having a mortgage that’s portable can allow you to avoid any large penalties for breaking your mortgage. A portable mortgage allows you to transfer the mortgage to the new property. You may need to combine it with an additional mortgage if the property you’re buying costs more than the one you’re selling.
LowestRates.ca works with 75+ banks and brokers to bring you competitive mortgage rates from lenders in Canada. We work with our partners to obtain their best deals and offers, and then we let them compete for your business. All you have to do is answer a few questions, and in minutes you’ll be provided with today’s mortgage rates. There’s no obligation, but you can choose to speak with our broker partner to secure your best rate and see if you're eligible for more savings.
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We have a strong selection of lenders on LowestRates.ca including the big banks and many independent providers and we’re adding more lenders all the time. This ensures we’re always delivering you a competitive rate. Even if you’re not ready to commit to anything, you can use our site as a starting point for research (it’s totally free, and you’re under no obligation).
The better informed you are, the more likely you'll negotiate a better deal for yourself. And, really, that’s what we care about the most.
This article has been updated from a previous version.*
When it comes to shopping for mortgages, most homebuyers in Canada tend to take a conservative approach.