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Prince George is the largest city in northern British Columbia. A hub city for the northern part of the province, Prince George has a population of 74,000 and is often referred to as the Northern Capital of British Columbia. Situated at the junction of the Fraser and Nechako rivers, Prince George is home to countless outdoor recreational activities, while also boasting an international airport and a bustling economy supported primarily by wholesale and retail, manufacturing, healthcare and social assistance, accommodation and food services, and construction.
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If you’re on the lookout for mortgage rates in Prince George, your down payment amount will determine whether you qualify for a high-ratio mortgage or conventional mortgage.
With a high-ratio mortgage, a homebuyer puts down less than 20% of the home’s price as a down payment. This allows buyers to purchase a home with less money upfront, but results in higher mortgage payments, since the buyer is required to borrow more toward the home’s price. A high-ratio mortgage loan also requires mortgage default insurance, which adds to your monthly costs.
A conventional mortgage, on the other hand, requires a down payment of at least 20% of the home’s purchase price. Conventional mortgages require more upfront money than high-ratio mortgages, but they will also have lower mortgage payments due to the fact that a buyer will have a smaller mortgage balance.
You can access both bank and broker mortgage rates in Prince George regardless of whether your mortgage is conventional or high-ratio.
|Date||Average Conventional Rate||Average High Ratio Rate|
Last Updated: June 1, 2023
As of mid-2021, both fixed and variable mortgage rates in Prince George are at historic lows. The best mortgage lenders in Prince George offer both fixed and variable mortgage rates, so choosing one over the other is typically a matter of preference and risk tolerance.
With a fixed mortgage rate, the interest rate and payments remain the same over the entire mortgage term (the most common term is five years). Fixed rates allow peace of mind knowing your payments will remain the same for a period of time.
Variable mortgage rates, meanwhile, may fluctuate. Mortgage companies in Prince George (and all over Canada) set their variable rates based on their prime lending rate, which is tied to the Bank of Canada overnight rate. Variable rates might go up or down over the course of a mortgage term, based on economic factors, which result in changes to the amount of interest vs. principal paid toward a mortgage or the mortgage payment amount.
Last Updated: June 1, 2023
Your ability to qualify for the cheapest mortgage rates in Prince George is determined by several factors, including your down payment amount, debt service ratios, credit score and income. Let’s dig into how each of these factors play a role in how lenders determine whether you qualify for the lowest mortgage interest rates in Prince George.
Down payment: The down payment is the amount of money a homebuyer puts toward the purchase of a home up-front. The minimum down payment in Canada is 5% of the home’s purchase price, and any down payment less than 20% of the home’s purchase price requires mortgage default insurance.
Across Canada, minimum down payment requirements are determined by the cost of the home:
Debt service ratio: A debt service ratio is the amount of monthly debt repayments a borrower has compared to their income. A buyer’s debt service ratio must fall below a certain threshold to qualify for a mortgage loan in Prince George. Lenders use two types of debt service ratios to help them determine whether or not a buyer can afford the mortgage on a home.
Gross debt service ratio (GDS): GDS ratio is calculated by adding a borrower’s mortgage costs, property taxes, utilities, and (if applicable) 50% of condo fees and then dividing that number by a borrower’s gross (before tax) household income. Lenders prefer to see a GDS ratio that doesn’t exceed 39%.
Total debt service credit ratio (TDS): TDS ratio is calculated by adding a borrower’s total monthly expenses (including the costs associated with GDS), as well as all loans and credit debt, and dividing it by a borrower’s gross household income. TDS must not exceed 44% to qualify for a mortgage.
Credit score: A credit score is another factor lenders use to determine who qualifies for the best mortgage rates in Prince George. Canada credit scores range from 300-900, and fluctuate based on how a borrower manages their credit. A credit score between 660 and 724 is considered good by Equifax Canada; a score between 725 and 759 is considered very good; a score between 760 and 900 is considered excellent. The higher your score, the better your chances of getting the best mortgage rates in Prince George Canada.
Employment and income: A borrower’s income will also determine mortgage qualification. Generally, the higher a homebuyer’s income, the larger the mortgage they can qualify for. Lenders want to see proof that a borrower has a history of steady employment and earns an income that would allow them to afford their mortgage payments. Buyers are asked to provide income statements, usually in the form of tax documents, to prove their income when applying for a mortgage. Your broker or lender will let you know exactly what documents are required as you go through the qualification process.
The average mortgage rate in Prince George depends on several individual factors. When combined, all of these factors will determine whether a mortgage borrower qualifies for a lower rate.
Using LowestRates.ca’s mortgage payment calculator, let’s play around with some numbers to calculate mortgages in Prince George and give a sense of what a borrower might pay in the region.
The size of your mortgage will depend on a few things, such as where you choose to live, the size of your down payment, and the mortgage interest rate you agree to pay. The median home price of all single-family homes sold in Prince George so far this year is $427,250, according to the BC Northern Real Estate Board. Using that benchmark price, we’ll calculate what a homebuyer might expect to pay in monthly mortgage costs.
For our purposes, we’ll assume a 5% down payment ($21,363), a fixed mortgage rate of 2%, and an amortization period of 25 years.
The monthly mortgage costs, including the required mortgage default insurance ($17,090), would be $1,791 per month.
However, increasing the down payment to 20.2% ($86,262) would result in a monthly mortgage cost of $1,444.
You can use Lowestrates.ca to help you compare the best mortgage interest rates in Prince George, which will help you lower your monthly mortgage costs.
Prince George’s housing market has been on an upswing over the past few years, similar to most other Canadian real estate markets. Still, it’s considerably more affordable than other real estate markets in British Columbia.
The median home price for single-family homes sold in Prince George in June was $455,842, according to the BC Northern Real Estate Board. That’s an increase of 16.9% year over year. The median price in June 2020 was $389,985.
However, home prices vary across the city. The median price for single-family homes sold in the western part of this city is $414,000; the median price for single-family homes sold in the eastern part of the city is $340,000; the median price for single-family homes sold in the northern part of the city is $450,000; and the median single-family home price in the southwestern part of the city is $505,000.
Closing costs are something to consider when purchasing a home. Closing costs are expenses a homebuyer must put forth before they can close on their home and take possession. Closing costs in Canada typically range from 1.5% to 5%. Below is a list of common closing costs:
Taxes are another major closing cost. Land transfer tax in B.C. is based on the price of the home. You can use LowestRates.ca’s land transfer tax calculator to calculate exactly how much you’ll pay, but here’s a basic breakdown:
One thing to note about purchasing a home in Prince George: While many regions in B.C. charge foreign nationals, foreign corporations and taxable trustees additional 20% tax on properties, Prince George does not.
You might be surprised to find out that mortgage terms and amortization periods are different. It’s important to know the difference between the two.
A mortgage term is the amount of time — typically between one and 10 years — a borrower agrees to a particular mortgage contract and rate. An amortization period is the entire life of the mortgage — typically 25 to 30 years. A mortgage amortization period comprises several mortgage terms.
Getting a great interest rate is only one aspect of negotiating house mortgage rates in Prince George. There are other considerations in a mortgage contract a borrower should consider as well, including whether or not you want an open or a closed mortgage.
An open mortgage is one that allows additional payments (called prepayments), in addition to the agreed upon weekly, bi-weekly, or monthly payments. Open mortgages are a good option for borrowers who would like to pay their mortgage off before the end of their amortization period, since they won’t be penalized for making additional payments.
Closed mortgages, meanwhile, have a set amount of prepayments that are allowed. Any additional prepayments may result in penalty fees. Since closed mortgages are less flexible, lenders typically offer lower rates than they do with open mortgages.
All of the best mortgage lenders in Prince George offer both open and closed mortgages — the one you choose is a matter of preference.
Your housing costs, whether you rent or purchase a home, are just one factor to consider when calculating the cost of living in Prince George. Purchasing a home will result in additional costs, such as utility payments, property taxes, and home insurance, among others. Renting also has additional costs, such as renter’s insurance.
However, in addition to housing costs, you might also have car costs, if you choose to live in Prince George.
British Columbia has the highest car insurance rates in Canada, according to the Insurance Bureau of Canada. The average cost of car insurance in B.C. is $1,832 per year. That’s quite expensive, even when compared to what Ontario drivers pay, which is the second highest average in the country at $1,505 per year.
When you compare mortgage rates in Prince George, a low rate is probably one very important factor. However, there are some other factors that are also important when evaluating a mortgage.
Prepayment penalties are one thing to consider. If you desire the freedom to pay your mortgage off before the end of your amortization period, you probably want an open mortgage that doesn’t charge prepayment penalties.
Speaking of penalties, make sure to understand what penalties you might incur. Breaking your mortgage before the end of the mortgage term, for example, might result in penalties, depending on the mortgage you choose.
If you think you might want to sell your home before the end of the mortgage term, you might want to opt for a portable mortgage. Portable mortgages allow you to transfer a mortgage from one home to another while keeping the same interest rate. This means you won’t have to break your existing mortgage contract and face financial penalties.
LowestRates.ca works with 50+ 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 for Prince George. 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.
The road to homebuying has been rocky for many Ontario residents, to say the least — and it’s not looking an...
This article has been updated from a previous version.* When it comes to shopping for mortgages, most homebuyers...