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With a population just over 70,000, Sarnia is the largest city to look out onto the cool waters of Lake Huron. The allure of beaches and trails may be what seals the deal for a homebuyer looking to stay connected to nature.
LowestRates.ca can connect you to the best home mortgage rates in Sarnia, Canada, by comparing mortgage rates from 75+ banks and brokers across Canada. Just tell us whether you’re buying a home, renewing or refinancing, tell us a few details about your home, and in three minutes we’ll show you the cheapest mortgage rates in Sarnia from lenders across the country. Keep reading to learn more about how to get a mortgage loan in Sarnia.
Depending on how much of a down payment you have, there are two main types of mortgages you can apply for: a conventional mortgage or a high-ratio mortgage.
We can describe a conventional mortgage many ways but essentially it is this: a loan for no more than 80% of the purchase price of a home. In other words, the buyer must have at least a 20% down payment on the purchase of a property in order to qualify for a conventional mortgage. Under this scenario, the buyer does not require mortgage insurance to back the purchase.
You can still buy a home with less than 20% down payment. That’s where a high-ratio mortgage comes in. High ratio mortgages are available to anyone who puts down as little as 5%. In Canada, this kind of mortgage requires insurance, otherwise known as mortgage default insurance. It protects the lender in case you can’t pay your mortgage payments. The cost is usually amortized over the lifespan of the mortgage.
|Date||Average Conventional Rate||Average High Ratio Rate|
Last Updated: September 1, 2021
In the world of mortgages, the fixed rate version is the most predictable option. It is built so that you know what you are going to pay, and for how long. Mortgage companies in Sarnia will quote you a fixed interest rate, let’s say 3% for five years, amortized over the length of time that it would take you to pay off the loan, which in Canada is typically set at 25 years. Those factors produce a monthly payment, which you agree to fulfill by signing the mortgage contract.
The variable rate, as its name suggests, is not set in stone. While it operates on a fixed term, the interest rates fluctuate because they are tied to the prime rate set by the government. You can still choose a fixed payment system with the variable rate, but how much of your payment goes to pay off interest or to pay off the mortgage premium will vary. You can also opt for fluctuating payments, in which case, be prepared for your monthly payments to change.
Choosing between a fixed mortgage rate, or variable mortgage rate in Sarnia, or anywhere, is a personal decision based on circumstance, and comfort level. Remember that shopping around is always the best policy to secure the lowest mortgage interest rate for your Sarnia dream home.
Last Updated: September 1, 2021
In Canada, the desire to own a home is real. But the government has imposed limits on how you can make that happen. Here are the key factors that can affect bank or broker mortgage rates in Sarnia.
Down payment: In 2008, the federal government in Canada banned 0% down payment mortgages as a way of guarding against the financial meltdown that came with the subprime mortgage crisis in the United States. There is a loophole that allows you to get one anyway, with a private lender, but experts advise against that for a whole host of reasons, one of them being that you start out of the gate with zero equity in the property you own.
The government has a sliding scale of rules regarding down payments:
Debt service ratios: There are other factors that go into calculating if you qualify for a mortgage for that Sarnia dream home. Debt service ratio is one of them. Essentially, lenders assess your ability to pay the mortgage off, based on your other expenses.
Credit score: Your credit score is also something that matters when it comes to getting a mortgage. Lenders want to see that you have met your financial obligations, made the payments that were necessary to credit cards, and weren’t maxing out your cards all time. Typically, they want to see that you’re borrowing less than 20 to 30% of your available credit limit. Bottom line: a bad credit score can pose problems when you’re shopping for mortgages.
Employment and income: And of course, there is employment status. It makes sense that if you can’t show a steady stream of income, then a lender is going to worry that you won’t be able to pay back the money they lend you. Things like salary, if the work is full time, part time, or seasonal, along with length of employment, all matter. If you have an investment property, the income generated from that counts. Someone who is self-employed has to provide additional documentation to prove their income.
Your mortgage will depend on various things, including where you are choosing to buy, the amount of money you can put down as a down payment, and the mortgage interest rate from a bank or broker that you secure. Remember that in Sarnia, as in the rest of Canada, you’ll have to get mortgage insurance if you don’t have a 20% down payment, which will be incorporated into your mortgage costs. Mortgage insurance is available from three sources: the Canada Mortgage and Housing Corporation (CMHC), which is backed by the government, or private insurance companies Canada Guaranty and Sagen.
Current mortgage rates in Sarnia vary. That means you’d be wise to compare rates using LowestRates.ca’s free online quote tool. Getting a personalized quote is the best way of getting a sense of what the average mortgage rate is in Sarnia these days. You can also use LowestRates.ca’s mortgage payment calculator to calculate your Sarnia mortgage and play around with different financial scenarios.
From coast to coast, housing prices in Canada continue to go up. But not all regions are seeing the same kind of growth. The province of Ontario, for example, is the second most expensive market, after British Columbia. It saw average prices jump from $708,000 to $835,000 from July 2020 to July 2021, according to the Canadian Real Estate Association.
In Sarnia-Lambton, average prices have gone from $412,000 to $502,000 over that same time period. According to the local real estate board, the median house price in Sarnia is still hovering around $435,000 in July, which is the same as in June.
Every penny counts, which makes mortgage rate comparisons in Sarnia, as in the rest of the country, crucial. LowestRates.ca can help connect you with the best mortgage lenders in Sarnia, so that you feel confident that you are getting a good deal. In a market as competitive as this, comparing today’s mortgage rates in Sarnia could give you the edge you are looking for in the house hunt.
All this talk about house mortgage rates in Sarnia may overshadow the additional costs associated with buying a home. These are called closing costs and they include things like title insurance, mortgage default insurance — which is the insurance you get if you have not put down 20% on the purchase price — property valuation fees, home inspection fees, legal fees and home insurance.
Most provinces in Canada have land transfer taxes or fees. Sometimes they are fixed amounts, and other times that are calculated as a percentage of the purchase price. Sarnia doesn’t have a municipal land transfer tax, but the province of Ontario does. Ontario’s land transfer tax is charged at a marginal rate, which means the total purchase price is sectioned off into different brackets and taxed at different rates. Here’s how it works, based on the property price:
If you’re shopping around for a mortgage rate in Sarnia today, make sure to keep in mind all these other costs that come with buying a home.
A mortgage term is the number of years in which you will be paying a specified interest rate, whether it’s fixed or variable. Another way of describing this would be the duration of your contract with the lender. You agree to pay a certain amount of annual interest for a certain number of years — those years amount to the mortgage term — and the lender agrees to honour those terms. The amortization period is the total amount of time that it would take you to pay off the entire mortgage amount. In Canada, it’s most common to secure a five-year mortgage term, over a 25 year amortization period.
This is important to understand, especially if you want the option to fast track payments on your mortgage. An open mortgage is one that gives you the flexibility to pay more of your mortgage off, either through larger monthly payments than originally agreed upon, or with lump sums.
Closed mortgages, on the other hand, don’t give you that flexibility at all. In fact, you could face financial penalties if you try to pay your loan off more quickly. That’s because paying a mortgage off more quickly means that the lender is making less than they had originally calculated in terms of interest payments.
As with all things, the cost of living in Sarnia depends on your choices. Specifically, your lifestyle and the types of expenses that you incur day to day. While Sarnia saw double-digit increases in the average price of homes in the last year, it’s still one of the more affordable real estate markets in Ontario. Choosing to rent rather than buying a home would alter your cost of living, along with how far you work, and how you get to that job. Sarnia has public transit, which is a more affordable form of transportation. But it might not be the most efficient way of getting around, and you might need a car, and insurance in order to operate it. It’s worth mentioning that Ontario has the highest car insurance rates in the country. And Sarnia was recently ranked as having the fourth highest property tax rate in Ontario.
Getting the lowest mortgage rate in Sarnia is one, albeit important, factor to consider when deciding on the mortgage rate that is best for you. Sarnia has wooed you, but make sure to assess things like prepayment privileges, which allow you to pay part or all of your loan ahead of schedule. Some mortgages will charge penalties to do that, because the lender is not going to be making as much money on interest if the loan takes less time to pay off. This kind of flexibility is important to keep in mind because plans change or we outgrow dream homes quicker than we thought and may need to sell a property and end a mortgage contract.
This is also where something called portability comes into play. Portability is the ability to transfer your existing mortgage and all the terms associated with it to a new property, without incurring any penalties. Not all lenders allow for that. It’s worth asking about, especially if you don’t know exactly what the near future may hold for you.
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).
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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.