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Shawinigan, which is about a 30-minute drive northwest of Trois-Rivières, is probably best known for its waterfalls (it was previously called Shawinigan Falls) and for being the birthplace of former prime minister Jean Chrétien. If you’re thinking about buying a home or moving there, you’ll want to ensure you get the best mortgage rates in Shawinigan or across Canada.
If you’re unfamiliar with mortgages and the process of purchasing a home, keep reading to learn the basics. We’re here to educate and inform, and help save you some money along the way.
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The size of your down payment will determine whether you get a conventional or high-ratio mortgage. A conventional mortgage is when the down payment is at least 20%.
A high-ratio mortgage is when the down payment is less than 20%. However, you must make a down payment of at 5%. With a high-ratio mortgage, you must buy mortgage default insurance from the Canada Mortgage and Housing Corporation (CMHC) or a private insurer. This type of insurance is sometimes also known as “CMHC insurance” even when it’s offered by private insurance companies such as Sagen or Canada Guaranty.
|Date||Average Conventional Rate||Average High Ratio Rate|
Last Updated: May 1, 2023
When you get a mortgage loan in Shawinigan or anywhere in Canada, you have the option of getting a fixed rate or a variable rate.
A fixed rate means the interest rate and the payments stay the same for the entire mortgage term (read below to learn more about terms). Over time, the amount that goes towards your principal will increase and the amount of interest you pay will decrease. Choosing a fixed rate gives you peace of mind if you’re worried about mortgage rates rising. One thing to keep in mind is that there’s typically a large financial penalty if you break a fixed rate mortgage.
A variable rate means the interest rate can fluctuate if the Bank of Canada increases or decreases rates during the mortgage term. Payments will typically stay the same, but there’s the possibility that they’ll rise or fall if you have a variable rate. It’s best to check with your lender. If rates do rise, the amount that goes towards your principal will decrease and you’ll pay more interest. The good news is that the penalty for breaking a variable rate mortgage is often lower.
Keep reading to find out the different factors that determine how you can get the best fixed or variable mortgage rates in Shawinigan.
Last Updated: May 1, 2023
You may have noticed that today’s most current mortgage rates in Shawinigan can vary significantly by lender. Also, there’s usually a difference between when you compare the average bank and broker mortgage rates in Shawinigan and across the country. This may be due to various factors, which are described below.
Down payment: You get a better rate when you make a down payment of less than 20% because you have to buy mortgage default insurance, which protects the lender. Your rate is higher when your down payment is 20% or more because you don’t need to get insurance and the lender isn’t protected.
The federal government sets the rules for down payments. Currently, you must make a down payment of at least:
Credit score: Mortgage companies in Shawinigan and throughout Canada will look at your credit score to decide whether or not to lend to you. Having a high score (typically 760 or above) indicates you’re less likely to miss any payments. As a result, expect to get a better rate than someone with a low or average score.
Debt service ratios: The best mortgage lenders in Shawinigan also look at two debt service ratios: your gross debt service (GDS) ratio and your total debt service (TDS) ratio. Debt ratios are used to measure how much of your household income goes toward paying your monthly housing costs and other debt obligations. To get the cheapest and lowest mortgage interest rates in Shawinigan, it helps to pay off any outstanding debt and do what you can to keep your credit score high.
GDS ratio: To calculate your GDS, you add your projected mortgage payments, heating costs, property taxes, and condo fees (if applicable) for the year and divide it by your gross salary. “Gross” means before taxes are deducted. Ideally, the GDS should be below 35%, but some lenders are fine as long as it’s less than 39%.
TDS ratio: To calculate your TDS, add up all the items in your GDS along with any regular debt payments and divide that by your gross salary. Credit card payments don’t count unless you’re carrying a balance, but student or car loan payments must be included. Your TDS should be less than 42%, but some lenders may approve you if it’s below 44%.
Employment and income: Your income is the deciding factor when it comes to the amount you can borrow. Lenders will also look at the amount of time you’ve been working at your current organization, if you’re working full time or part time, and whether it’s a permanent or contract role. Self-employed individuals have to jump through more hoops and often need to provide additional documentation, bank statements and copies of past tax returns.
The size of your mortgage will be based on two things: how much of a down payment you can make, and the purchase price of the home you’re buying. Those two items — plus whether you’re able to get the best home or house mortgage rates in Shawinigan — will be key factors in determining your regular payments.
According to the Quebec Professional Association of Real Estate Brokers’ Centris database, the median price of a single-family home was $163,500 in Shawinigan in the second quarter of 2021. That’s an increase of 22% over the same period last year.
If you buy a home at the median price, your mortgage amount will depend on the amount of your down payment. When you make a down payment of 20%, it will be considered a conventional mortgage. That means your down payment will be $32,700 and your mortgage will be $130,800.
But if you can’t afford to make a down payment of at least 20%, you must get mortgage default insurance. The premium you have to pay varies depending on the size of your down payment and it will be added to your mortgage.
To calculate your mortgage payments in Shawinigan, use LowestRates.ca’s free mortgage payment calculator. You can also do a comparison of different mortgage rates in Shawinigan to find out how that will affect your payments.
Compared to expensive cities such as Toronto and Vancouver, Shawinigan home prices look like a steal. But there are many reasons why prices are lower.
First, it’s the location. Shawinigan is about a two-hour drive from both Montreal and Québec City, which means it’s too far to be a commuter city. Second, it doesn’t have a large number of employment opportunities in various job sectors that other cities have. And third, there aren’t as many attractions to visit in Shawinigan compared to larger cities.
As mentioned before, the median price of a single-family home was $163,500 in the second quarter of 2021. However, Shawinigan isn’t a big condominium city — there were only a handful of sales in the second quarter of 2021, which isn’t enough to provide accurate statistics on average sale prices.
There are costs involved with buying a home that you might not be expecting. These are called closing costs and they’re usually equivalent to 1.5% to 4% of the property’s purchase price.
Common closing costs include the following:
One additional closing cost is the last transfer tax, which is commonly called the “welcome tax” in Quebec. An increasing percentage of tax is applied to different portions of the home price. In Shawinigan, the rate is as follows:
To determine the amount of land transfer tax you’ll pay on your Shawinigan home, use LowestRates.ca’s land transfer tax calculator.
There’s a lot of jargon when it comes to mortgages. Here’s a quick explainer of a mortgage term and an amortization period:
Mortgage term: This is the length of time you have a contract with a lender. When the term ends, you can stick with your existing lender or look for a lender that offers a better interest rate. The most common term is five years, but it can vary between six months and 10 years.
Amortization period: This is the amount of time you have to pay off your mortgage. When you have a shorter amortization, you’ll pay less interest than a mortgage with a longer amortization. The most common amortization is 25 years, but it’s possible to get a mortgage with an amortization that’s as little as 10 years or as long as 35 years. However, you can’t get a mortgage with an amortization of more than 25 years if you have a high-ratio mortgage.
When you look at current mortgage rates in Shawinigan, you’ll probably notice a significant gap between open and closed rates. Read more to find out why.
An open mortgage allows you to make lump sum payments whenever you want or to pay off the entire mortgage in full without incurring any penalties. To get this flexibility, you have to pay more in the form of a higher rate.
A closed mortgage comes with a number of restrictions. You’re usually only able to make one additional payment a year and are limited in terms of the size of the payment. You also have to pay a penalty if you pay off the mortgage in full. To help persuade you to live with these restrictions, lenders will offer you a lower rate.
Shawinigan is an affordable place to live compared to other parts of Quebec. The median price of a single-family home came in at $163,500 in the second quarter of 2021.
In Montreal, the median price is more than four times higher: $725,000 for a single-family home on the island. And the median price for a single-family home in Quebec City ($310,000) is nearly twice as much as Shawinigan.
Another item to consider about living in Shawinigan is the cost of auto insurance. Quebec is known for its low insurance rates. In 2020, the average annual insurance premiums were $717 versus $1,832 in British Columbia and $1,528 in Ontario.
When you add up the cost of a home and auto insurance rates, Shawinigan is a much less expensive place to live compared to Canada’s largest cities.
There are other factors to consider than just getting one of the lowest mortgage rates in Shawinigan. These are three things to consider:
Prepayment privileges: These allow you to increase your regular payments and make additional payments to your mortgage during the life of your term. Typically, you’re allowed to increase your payments by a specific percentage annually and make a prepayment up to a certain amount once a year. Either way, you’ll pay off your mortgage sooner and pay less interest.
Penalties: There are different ways these are determined and they can vary by lender. Your lender will take into account any changes in rates, the amount you want to prepay, the number of months remaining before the end of your term, and the method it uses to calculate the penalty. You should examine the penalties closely if you think there’s a possibility you may need to break your mortgage in the future.
Portability: If you plan to sell a home and buy another one, some lenders will let you move the mortgage to the new property. This means you keep the same rate and payments without having to break your mortgage and qualify for a new one. There are still some fees to pay, but they’re much smaller than the penalty you would pay for breaking the mortgage contract.
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. 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).
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...