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Conventional vs. high-ratio mortgages: Which is cheaper?
Mortgages come in two basic flavours — conventional and high-ratio. If you have a substantial mortgage down payment on a Manitoba property — at least 20% of the purchase price of your new home — you qualify for a conventional mortgage. That means your lender is backing the mortgage without any additional guarantees.
If you have less than 20% for a down payment, you’ll be taking on a high-ratio mortgage. You’ll need to buy mortgage insurance, which guarantees your lender will be repaid. Expect your insurance to cost between 2.8% and 4% of your total mortgage, depending on the size of your down payment.
But don’t despair over this added expense. High-ratio mortgage rates in Manitoba tend to be cheap. 1High-ratio mortgages can come with lower interest rates than conventional mortgages. That’s because mortgage insurance means your lender is taking on less risk.
If you have the option of choosing between a conventional and a high-ratio mortgage, talk to your mortgage advisor before deciding which flavour is right for you.
Conventional 5-year fixed mortgage rates vs. high ratio 5-year fixed mortgage rates in Manitoba
| Date | Average Conventional Rate | Average High Ratio Rate |
|---|---|---|
| 05/20 | 2.60% | 2.28% |
| 06/20 | 2.53% | 2.05% |
| 07/20 | 2.49% | 1.99% |
| 08/20 | 2.39% | 1.99% |
| 09/20 | 2.04% | 1.89% |
| 10/20 | 1.97% | 1.83% |
| 11/20 | 1.83% | 1.72% |
| 12/20 | 1.85% | 1.68% |
| 01/21 | 1.75% | 1.65% |
| 02/21 | 1.71% | 1.49% |
| 03/21 | 2.14% | 1.74% |
| 04/21 | 2.39% | 1.89% |
Last Updated: May 1, 2021
Fixed rate vs. variable rate mortgages: Which is cheaper?
A lot of homeowners come to our site wanting to know the answer to the question, ‘What is the average mortgage rate in Manitoba?’ In order to answer it, we need to first distinguish between fixed and variable rate mortgages. Each type of mortgage behaves differently, so a harmonized mortgage rate wouldn’t be a useful benchmark.
With a fixed rate mortgage, you’ll pay interest at a set rate for the entire term of your mortgage loan. The most popular mortgages in Manitoba are 5-year fixed mortgage rates for this reason.
With a variable rate, your interest payments will fluctuate as rates move up or down. Variable rate mortgages in Manitoba, Canada usually cost less than fixed-rate loans — and they can save you even more money if rates fall over the term of your mortgage. But you could end up paying more if rates increase. Is the risk worth it? We’ve pulled Manitoba data from LowestRates.ca’s user database to show you how the average mortgage rate in Manitoba for both fixed and variable mortgages stack up.
We found that no matter which mortgage type you go with, Canada’s current financial climate has enabled interest rates to reach record lows. Either way, you’ll be getting a great deal. Find Manitoba’s best fixed or variable mortgage rates by comparing lenders online.
5-year fixed vs. 5-year variable mortgage rates in Manitoba
| Month | Fixed | Variable |
|---|---|---|
| 05/20 | 2.00% | 2.50% |
| 06/20 | 2.02% | 2.32% |
| 07/20 | 1.98% | 2.31% |
| 08/20 | 1.97% | 2.33% |
| 09/20 | 1.81% | 2.02% |
| 10/20 | 1.77% | 1.96% |
| 11/20 | 1.84% | 1.79% |
| 12/20 | 1.78% | 1.77% |
| 01/21 | 1.62% | 1.75% |
| 02/21 | 1.50% | 1.63% |
| 03/21 | 1.50% | 1.93% |
| 04/21 | 1.50% | 2.15% |
Last Updated: May 1, 2021
Factors that affect your Manitoba mortgage rate
In the big picture, the state of the economy drives mortgage interest rates. They are generally higher when growth is strong. They fall when the economy slows. Mortgage rates rise and fall in the same pattern. That’s as true in Manitoba as it is anywhere else in the country.
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Typical mortgage amounts in Manitoba
(Assumptions: 2% interest rate, 25-year amortization, avg. price single family home of $306,200)
Winnipeg property at 20% down: $1,037.29 / $244,960 borrowed
(Assumptions: Monthly mortgage payment at 2% interest rate, 25-year amortization, avg. price single family home of $306,200)
Manitoba housing market and home prices
Avg. Single-Family Home Price Winnipeg: $306,200 Jan. 20215
Avg. Townhouse Price Winnipeg: $233,500 Jan. 20215
Avg. Apartment Price Winnipeg: $197,000 Jan. 20215
Avg. Housing Price. Brandon, Man.,: in 2020.: $292,0246
Closing costs in Manitoba
Expect to pay 2% to 2.5% of your home’s purchase price in closing costs in Manitoba. Closing costs include legal fees, recording fees required by the provincial government to register your deed, title insurance, other costs, such as reimbursing property taxes paid by the previous owner, home inspections and so on.
Then there’s the provincial land transfer tax. Manitoba’s land transfer tax works on a sliding scale. You’ll pay a total of $1,650 on the first $200,000 of your home’s value plus 2% on any amount more than $200,000. For homes priced below $200,000, you pay no tax on the first $30,000 of the purchase price, 0.5% on amounts between $30,001 and $90,000, 1% on amounts between $90,001 and $150,000 and 1.5% on amounts between $150,001 and $200,00.
Your questions about mortgages in Manitoba, answered.
What’s the difference between a mortgage term and an amortization period?
The amortization period on your mortgage is the total number of years you expect it will take to pay off the entire loan. Most new mortgages come with amortizations of 25 years, although periods can range from one year to 30 years. To see how much the size of your payments is affected by amortization periods, use a Manitoba mortgage rates calculator.
The mortgage term is a shorter period — usually four or five years — which represents the length of time your lender will provide your mortgage loan at a given interest rate. By far and away, the most popular term length in Manitoba is the 5-year mortgage. Rates for 5-year mortgages, for the majority of homebuyers, are the most affordable. In some cases, it’s possible to get a 6-month term on a mortgage in Manitoba, though rates on mortgages tend to be prohibitively expensive for most. At the end of the term, you’ll renegotiate your mortgage for a new term, either with your existing lender or a new financial institution. Most lenders offer terms ranging from one year to 10 years.
What’s the difference between an open mortgage and a closed mortgage?
Mortgage rates will vary depending on whether you get an open mortgage or a closed mortgage.
An open mortgage gives you the flexibility to pay off the mortgage on your house at any time. You can also refinance your mortgage, or renegotiate the terms. With a closed mortgage, if you pay it off before the mortgage term ends, you’ll have to pay a penalty.
Because the rules are more strict, closed mortgage rates in Manitoba generally have lower interest rates compared to the rates on open mortgages in Manitoba.
How much does it cost to live in Manitoba?
With a median family income of $81,600 in 2018, Manitoba sits right in the middle of the pack compared to Canada’s other provinces. You can earn more in Ontario or Alberta, but incomes are higher than what you’ll find in, say, the Maritimes.
On top of that, Manitoba offers some advantages when it comes to affordability. According to a National Bank of Canada study, it takes only slightly more than two years for Winnipeg residents to save up for a 6% down payment on an average home, based on a savings rate of 10% of income. That’s pretty good, considering the national average is five years.
Rents, meanwhile, are competitive. CMHC reports the average monthly cost of a two-bedroom apartment at $1,262 in Winnipeg and $1,215 province-wide.16 Gasoline prices, meanwhile, are among the lowest in Canada.17 Auto insurance rates are again in the middle of the national pack, but cheaper than in Ontario, Saskatchewan and Alberta.
How much does getting a lower interest rate matter in Manitoba?
Finding the lowest mortgage rates in Manitoba can help you potentially save thousands of dollars over the life of your mortgage. But interest rates are only part of the equation when it comes to figuring out which mortgage is best for you. For example, most mortgages allow you to make lump-sum payments on your mortgage principal without penalty. An open mortgage lets you pay off the entire amount whenever you like. Closed mortgages only allow limited pre-payments but generally come with lower interest rates. So, consider your cash flow over the long term when choosing a mortgage. If you expect a windfall down the road, you may be better off paying a bit more in monthly interest on an open mortgage for the ability to make a large lump sum payment later on.
You should also consider whether you want a “portable” mortgage when you buy your home. Portability allows you to transfer the balance of your mortgage, its term and interest rate to the purchase of a new home if you decide to move before your mortgage term ends. This means you avoid penalties for breaking a mortgage early, which can be very costly.
But remember, not all mortgages are portable, especially variable rate mortgages. If you think you might want to sell your home before the end of your mortgage term—maybe you have a growing family—think twice before signing up for that low-interest variable rate plan.
Your questions about LowestRates.ca, answered.
How are mortgage rates determined on LowestRates.ca?
LowestRates.ca works with more than 30 banks and brokers to bring you competitive mortgage rates from lenders in Canada and we’re always adding new ones. 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 interest rates for Manitoba. 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.
Is it safe to get a mortgage online?
Yes, it’s safe — you no longer need to visit a bank branch or mortgage broker’s office in person to apply for a mortgage. It’s becoming increasingly common for Canadians to apply for mortgages online. LowestRates.ca only works with reputable, trustworthy financial institutions. Your credit score won’t be affected and your information is secure. We don’t share your information with anyone unless you want to connect with a mortgage broker. We take care of the heavy lifting by comparing the market for you and can connect you with the best mortgage lenders in the country.
How do I know I’m getting the lowest rate?
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.