In the big picture, the state of the economy drives mortgage interest rates. Interest rates on mortgage loans are generally higher when economic growth is strong and they fall when the economy slows.
So, who has the best mortgage rates in Nova Scotia, you ask? There’s no clear-cut answer.
The specific mortgage rate you get from a lender depends on the details of the mortgage you want and your own financial history.
For example, the term of your mortgage—the number of years until you have to renew it—influences your interest rate. Shorter-term loans generally come with lower rates because it’s easier for lenders to guess at whether interest rates will have risen or fallen when it comes time to renew. Longer-term mortgages usually come with higher interest rates, but they do offer an opportunity to lock in a good deal if you think interest rates will rise substantially in the coming years.
Your interest rate will also be affected by your ability to take on debt, given your income. This is called the “debt-to-income ratio.” The lower your ratio, the less risk you pose for a lender. A lower interest rate naturally follows — unless you have other debt, like a car loan for instance. For that reason, mortgage lenders also look at your total debt obligations and measure these against your income. This is known as your “debt-service ratio,” the portion of your income that goes to paying off debt. Again, the lower your debt-service ratio, the better interest rate you’ll likely get.
Another thing that will influence the interest rate on your mortgage is your down payment on your Nova Scotia home. High-ratio mortgages (where the buyer puts 20% or less down) tend to fetch the lowest rates thanks to mortgage insurance provided by the Canadian Mortgage Housing Corporation.
Lastly, your credit history and credit score influence your interest rate. The better your history and score, the better rate you’ll be eligible for. For reference, a credit score of 700 and up is considered good. Anything lower than that is considered a poor credit score. Expect qualifying for a mortgage in Nova Scotia with a bad credit score to be a challenge.
What are current mortgage rates in Nova Scotia? Compare mortgages with LowestRates.ca to see what your best fixed or variable rate mortgage is for your Nova Scotia home.