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Home Trust is a financial services institution that provides a variety of mortgage options. To help you figure out if one of their home loans will work for you, here is a comprehensive overview that explains prime rates, posted rates, the difference between fixed and variable mortgages, as well as address any questions you might have about the lender’s mortgage policies and products.
Serving home buyers across Canada, Home Trust offers mortgage rates that are both competitive and applicable to underserved consumers, such as those who are self-employed or who have experienced past financial difficulties. There are two core mortgage products offered by the creditor:
We will explain how these products work and may be applicable to you in the following Q&A sections. And whenever you are ready to find the perfect mortgage for your new property, you can compare Home Trust mortgage rates online and see how they compare to 75+ other mortgage lenders and brokers on LowestRates.ca.
First, let’s establish what a prime mortgage rate is. Also known as a prime lending rate, it is the average rate of interest that a bank or other lending institution, like Home Trust, charges for funds they lend to consumers. It usually serves as the standard or starting point for negotiation on any variable loan (we talk more about variable rates below), ranging from business or vehicle loans to, of course, mortgages.
How do financial institutions set their prime rates? Banks and other creditors in Canada base their prime rate on the policy interest rate (also known as an overnight rate) set by the Bank of Canada, our country’s central bank. The Bank of Canada announces whether or not they are going to change this rate eight times a year, on set dates. Because banks and other lending institutions base their prime rate on Bank of Canada actions, and even though they are different companies, they usually all end up with roughly the same prime lending rate.
Home Trust offers variable mortgages based on their prime rate for uninsured mortgages (which they also refer to as a Classic mortgage). Usually it’s a calculation of the prime rate plus or minus an additional percentage of interest, determined for each potential borrower based on their credit rating and big picture financial situation. Since there are so many variables at play, your best bet is to search and compare Home Trust mortgage rates against other lenders using LowestRates.ca’s mortgage comparison service.
Like most other financial institutions, Home Trust publishes a baseline list of the mortgage loans they offer, accompanied by a standard rate for that type of loan. These are called posted mortgage rates and are published on their website. These rates can change regularly, and are often influenced by the rates of competitors and the Bank of Canada –– because of course every creditor wants to seem the most attractive to potential borrowers.
There are two key points to keep in mind when considering posted mortgage rates:
Compare all the mortgage rates Home Trust offers today by searching LowestRates.ca.
Signing up for a fixed mortgage loan rate with Home Trust means the amount of interest you pay over a set period of time –– known as a “term” –– will not change. Lenders generally have several term options available for mortgage applicants to choose from. For instance, as a baseline, Home Trust offers one, two, three, four and five year fixed rate terms. Once a term ends, if you have not paid off your mortgage, you will then have to renegotiate a new agreement with Home Trust or seek one out from a different financial institution.
Fixed rates are usually higher than loans with variable rates. But this is because they offer a few key benefits:
Home Trust provides fixed rate mortgages as part of both their Classic and Accelerator mortgage programs. Use LowestRates.ca to find current mortgage rates from Home Trust.
Variable mortgage rates tend to be lower than fixed mortgage rates –– because variable interest rates fluctuate, depending on your lender’s prime rate, throughout whatever term (length of mortgage agreement) you have committed to .
So if you end up with a Home Trust variable mortgage, as their prime rate changes due to market conditions and the Bank of Canada, your interest rate will go up or down. It’s more of a gamble than choosing a fixed rate mortgage, because there is no way to predict if you will end up paying more or less interest. This also means you will not know how much loan repayment you are set to achieve by the end of your mortgage term.
Home Trust provides variable rate loans as part of their Classic mortgage program, which offers:
Compare open and closed variable mortgage interest rates from Home Trust with LowestRates.ca quotes.
Although big banks might be the first lending option people consider for a mortgage, findings from LowestRates.ca and published by CBC News, show that smaller lenders consistently offer less expensive interest rates.
Not only can Home Trust potentially offer lower interest rates than larger competitors, but they also offer solutions for people who might otherwise struggle to qualify for a mortgage –– for example, applicants with “bruised credit.”
Their Classic mortgage program for instance is structured for borrowers who may have “non-traditional income” and offers shorter term (five years and under) open and closed, fixed and variable mortgages. Meanwhile, their Accelerator program provides fixed rate mortgages to applicants who have re-established good credit after a previous bankruptcy.
Home Trust has mortgage options for borrowers who seek to purchase or refinance “single-family dwellings, condominiums, duplexes, triplexes, store and apartment and rental properties.”
Eligibility for a variable or fixed rate mortgage with Home Trust is generally dependent on their review of your overall financial status and credit rating –– that said, the lender makes it clear they are willing to offer mortgages to applicants who may otherwise struggle to be approved for one, such as self-employed borrowers, first time home buyers and those purchasing homes who are new to Canada.
Unlike many larger institutions, Home Trust does not offer pre-approved mortgages. But as a rule of thumb, information you need to finalize your application includes:
Being pre-approved for a mortgage can ease some of the stress of homebuying, speed up the process, and increases the chance you’ll be successful when you make a bid on a home. Pre-approval demonstrates to sellers that you are qualified to purchase the property in question. Be aware, though, that Home Trust does not offer pre-approved mortgages.
Determining how much mortgage debt you can afford is based on an assessment by Home Trust, considering elements like the value of the home you want to buy and the down payment you have saved. For Classic mortgages, which are ideal for borrowers with complicated or challenging financial backgrounds, the broker requires a minimum 20 per cent down payment. Their Accelerator mortgages, on the other hand, only require a five per cent down payment (though mortgage insurance is required), as applicants tend to have higher credit scores.
If you are approved, Home Trust will loan up to 80 percent of the appraised value of the property you are interested in purchasing, for terms of up to five years. The maximum amortization period –– how long you can take to fully pay off a mortgage loan –– on offer is 30 years.
The specifics of your negotiated agreement (such as term length, open versus closed and fixed versus variable mortgages, the dates on which you will make your loan payments etc.), will of course determine most of the conditions of your Home Trust mortgage –– especially when it comes to enforcing financial penalties if you do not keep the terms you agreed to.
As with other credit institutions, Home Trust has their own set of rules regarding payment scheduling and prepayment that are established in the application process. Some examples include:
Be sure to read and understand all the terms and conditions related to your Home Trust mortgage loan before committing.
When your Home Trust mortgage term is about to expire, you have two options available to you if you still owe a balance on the property loan:
Meanwhile, if you have paid off your home loan completely, Home Trust will send you or your legal representative forms that outline the discharge of your mortgage.
The length of time it takes to pay off a mortgage is called the amortization period and is determined based on the cost of the home you are buying, the interest rates you are charged, and how much your regular payments are set up to be.
Home Trust mortgages tend to be short term (five years or less) in length, so if you have a longer amortization period, say 25 years, you will have to renew your mortgage a few times at least. Something to consider: though lengthy amortization allows for lower regular payments, it will ultimately cost you more interest in the long run.
If your plan from the get-go is to pay your mortgage off as quickly as possible, you should seek as short an amortization period as you can, coupled with as high regular loan payments as you can afford.
Home Trust also offers flexibility for those who wish to repay their loans faster, such as the option to pay up to 20 per cent of the principal loan each year, on your mortgage date anniversary. And depending on the type of mortgage you have chosen, it may also be possible to increase your regular payment amounts and/or payment frequency mid-term.
The penalty for paying off a Home Trust loan earlier than outlined in your contract depends on the type of mortgage you have.
If you have chosen an Accelerator mortgage from Home Trust, you are allowed to pay off the balance at any time, but may owe up to three months interest or a differential rate determined by the creditor. With a Classic mortgage from Home Trust, you are only allowed to break the terms of your agreement if you are selling the property. And again, you will be charged either three months interest or a differential rate.
LowestRates.ca works with 75+ banks and brokers across the country to bring you the best rates. 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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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.