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Sherbrooke is a hidden gem in La Belle Province. Surrounded by mountains, rivers, and lakes, Sherbrooke is home to some of the best skiing in eastern Canada and boasts several ski hills.
There are eight financial institutions in Sherbrooke, educating over 40,000 students. It’s also home to a growing knowledge-based economy, which is helping to boost its already well-established service economy. It’s a growing city with good job prospects and a lot of fun recreational activities to keep you occupied.
If you’re looking to buy your forever home in Sherbrooke, LowestRates.ca is here to help. Our site allows you to compare mortgage rates from 75+ banks and brokers across Canada. Just tell us whether you’re buying a home, renewing or refinancing at the top of the page. In just three minutes, we’ll show you mortgage rates in Sherbrooke.
Before you start comparing average mortgage rates in Sherbrooke, you’ll need to figure out if your mortgage is classified as conventional or high-ratio. The good news is that as of mid-2021, both conventional and high-ratio mortgage rates are at historically low levels. Mortgage companies in Sherbrooke and across Canada will lend for both conventional and high-ratio mortgages.
Buyers who put 20% down as a down payment have a conventional mortgage. Conventional mortgages don’t require mortgage default insurance — which is an added expense — but lenders often charge higher rates for conventional mortgages.
Buyers who have less than 20% for a down payment have a high-ratio mortgage. While high-ratio mortgage rates are often lower than conventional mortgage rates, they require mortgage default insurance, which is an added expense on top of your mortgage balance.
|Date||Average Conventional Rate||Average High Ratio Rate|
Last Updated: September 1, 2021
One major mortgage consideration is whether to choose a fixed rate or a variable mortgage rate. Both are historically low, so the one you choose will likely be a personal preference based on your own risk tolerance.
A fixed rate means the interest rate is set in stone over the term of the mortgage contract. Let’s say you’re interested in five-year fixed mortgage rates in Sherbrooke. You choose a five-year term with a fixed interest rate of 2%. That means your mortgage rate would be set at 2% and remain unchanged over the five-year term.
Variable rates, on the other hand, can fluctuate over the mortgage term. Let’s say you’re looking at variable mortgage rates for your Sherbrooke home. You lock in a variable interest rate of 1.8%. Your rate may fluctuate over the term of your mortgage. That’s because variable rates are typically determined by lenders’ prime rates, which rise and fall based on a number of economic factors.
When choosing your mortgage loan in Sherbrooke, you’ll want to consider what’s most important to you. If you want stability and the guarantee that your monthly mortgage payment will remain consistent over the course of your term, you’d likely prefer a fixed rate. If you’re comfortable with the fluctuations of a variable rate and believe those rates will remain below the price of a fixed rate, you might prefer a variable rate.
Last Updated: September 1, 2021
It’s important to understand the factors that can affect whether you qualify for the best mortgage rates in Sherbrooke. Lenders will consider a number of different things to determine whether or not they’ll lend you money, and what interest rate they’ll offer.
Down payment: The size of your down payment is important, as it will impact the overall amount of your mortgage and how much you can afford to spend on a home. The larger the down payment, the less you will be required to borrow towards the home, meaning your mortgage will be smaller.
A buyer can put as much down toward a home as they’d like, but the Canadian government requires minimum down payment requirements based on property price.
Buyers should also be aware that mortgage default insurance is required if you put less than 20% down toward a home. There are three mortgage default insurers in Canada: the Canada Mortgage and Housing Corporation (CMHC), Canada Guaranty and Sagen.
Gross debt service ratio (GDS): Lenders will calculate a buyer’s gross debt service ratio to determine whether or not the buyer can afford a home. The GDS is calculated by adding mortgage costs, property taxes, utilities, and 50% of condo fees (if buying a condo) and dividing that number by the buyer’s household gross (before tax) income. The maximum GDS must be at or below 39% for a buyer to qualify for a mortgage in Canada. A lower GDS ratio shows lenders you can afford housing costs based on your household income.
Total debt service ratio (TDS): Lenders will also calculate a buyer’s total debt service ratio during the mortgage qualification process. TDS is calculated by adding the total number of monthly expenses, including debts and other financial obligations, and dividing that by a buyer’s household gross income. The maximum TDS must be at or below 44% for a borrower to qualify for a mortgage in Canada.
Credit score: This is one of the most important factors that determines whether a buyer can qualify for the lowest mortgage interest rate in Sherbrooke. Credit scores signal to lenders how reliable a borrower might be at managing and paying down debt. To qualify for the best mortgage rates in Sherbrooke and across Canada, a borrower will require to have a good credit score.
Credit scores are set based on how a person manages their debt; how much debt a person has, their payment history, the length of their credit history, and other factors. Scores range from 300-900 and are considered good, very good, or excellent within a range of 660 to 900. The higher your credit score, the better chance you’ll have of qualifying for the lowest mortgage rates in Sherbrooke.
Income and employment: Your income is yet another factor that will help you qualify for mortgage interest rates in Sherbrooke. Generally, the higher and more stable your income, the more you can borrow toward a home.
Lenders require proof that the borrower has a history of making enough income to afford the home for which they’re applying for a mortgage. They’ll want to know whether a borrower is a salaried employee or self-employed, and whether or not you have investment income or own additional properties.
Your lender will likely require two years of employment history, which can be provided in the form of past T4 tax documents. Both salaried and self-employed borrowers can qualify for house mortgage rates in Sherbrooke; however, the documents they will need to provide to prove their income will differ. Typically, self-employed borrowers will be required to provide more paperwork to lenders than salaried employees when applying for a mortgage.
The size of your mortgage will depend on the cost of your home, the size of your down payment and your mortgage interest rate. Mortgage default insurance, which is required for all mortgages with less than 20% down payment, will also determine the size and cost of your mortgage.
Let’s crunch some numbers to see what a typical mortgage amount in Sherbrooke might look like.
Say you purchase a home in Sherbrooke for $388,820. Using LowestRates.ca’s mortgage payment calculator, we can make some assumptions to get an estimate of the typical mortgage amount. For this example, we’ll assume a down payment of 5% ($19,441), a fixed interest rate of 2.2%, amortized over 25 years. Since we’re using a 5% down payment, mortgage default insurance will be required at a cost of $15,553 (which is rolled into the mortgage and paid off over the duration of the amortization period).
According to the calculator, the monthly mortgage payment on that home would be $1,630.
Now, say you’d like to put more money down so you can avoid mortgage default insurance. Your monthly mortgage payment would be lower because you’re borrowing less toward the home and you wouldn’t have to pay mortgage insurance.
In that scenario — assuming the same home price, amortization period, and interest rate, but a down payment of 20.34% — the monthly mortgage cost would be $1,312.
While Sherbrooke’s housing market — like most Canadian markets — has been on the rise over the past year, it’s still home to some of the country’s most affordable real estate. The benchmark home price in June 2021 in Sherbrooke was $388,820, up 31.3% year-over-year.
That’s much more affordable than the benchmark Canadian home price, which was $679,051 in June.
Sherbrooke is also more affordable than some other Quebec markets. For example, the benchmark Montreal home price was $498,000 in June; the benchmark Gatineau home price was $425,549. However, it’s pricier than some other markets such as Quebec City ($296,200), Saguenay ($250,768), and Trois-Rivières ($254,809).
You may be surprised to find out that there are additional costs to buying a home, in addition to the down payment and the cost of the home itself. These are called closing costs, and they typically run a buyer anywhere from 1.5% to 4% of the home’s purchase price. Some common closing costs include:
Land transfer taxes are an additional closing cost that must be paid. Sherbrooke refers to these as welcome tax. They’re applied on a sliding scale, increasing as the cost of the home increases:
The welcome tax notice will be sent within 1 to 4 months and home buyers must pay it as a single payment within 30 days of the bill issue date.
Both amortization period and mortgage term are important to take into consideration when looking at today’s mortgage rates in Sherbrooke.
Mortgage term: Is the contracted time a buyer agrees to pay a certain rate. For example, if a buyer chooses a five-year fixed rate as their first mortgage, they’re agreeing to pay that specific rate for a period of five years. Most buyers will have multiple terms as they pay off their mortgage over a longer period of time.
Amortization period: The amortization period, meanwhile, is the entire life of the mortgage. When buying a home, a buyer can choose how long they’d like to amortize their entire mortgage. The most popular amortization periods in Canada are 25 years and 30 years. Note, that high-ratio mortgages can only be amortized a maximum of 25 years in Canada.
Another important consideration when choosing a mortgage is whether you’d like an open or closed mortgage.
An open mortgage is one that allows the buyer to make as many payments as they’d like, over and above the agreed-upon weekly, bi-weekly, or monthly payments. This flexibility is great for people who would like to pay their mortgage off before the end of the amortization period.
A closed mortgage has a set amount of pre-payments (additional payments) a buyer can make on their mortgage. While closed mortgages may lack the flexibility of an open mortgage, many of the best mortgage lenders in Sherbrooke will offer lower rates on closed mortgages.
When deciding on which one is right for you, weigh the pros and cons — is the flexibility of an open mortgage more important than a slightly lower rate, or is the lowest possible rate your goal? Answering that question should help you choose.
It’s good to consider the overall cost of living before making a move. Once you calculate your mortgage in Sherbrooke, you’ll have a sense of what your house will cost each month. However, that’s just one aspect of your cost of living.
You should also take into consideration your utilities, heating costs, condo fees (if applicable), and home insurance. These are all costs associated with purchasing a home. Choosing to rent instead of buy will mean fewer monthly expenses, but that also comes at the expense of not owning your own home.
In addition to housing costs, you’ll likely have monthly automobile costs if you choose to live in a smaller city like Sherbrooke. You might have a monthly car payment and monthly car insurance to add to your expenses as well.
Luckily, Quebec has some of the lowest car insurance rates in Canada, according to the Insurance Bureau of Canada. The average yearly car insurance premium in Quebec is $717; the average monthly premium is $59.75. That’s much more affordable than car insurance in Ontario, where the average yearly premium is $1,505 per year and $125.42 per month.
Buyers are interested in finding the cheapest mortgage rates in Sherbrooke — and for good reason. The lower the rate, the lower your monthly mortgage cost. However, the mortgage rate is only one factor that should be considered when doing a mortgage rates comparison in Sherbrooke.
Before signing a mortgage contract, some other things to consider are prepayment privileges, penalties, and portability.
Prepayment privileges allow the mortgage holder to make additional mortgage payments, in addition to their agreed-upon payments, without incurring any penalties. Prepayment privileges might be attractive to buyers who earn income in addition to their salary, such as commission and bonuses, and would like to make additional payments toward their home.
Buyers should also consider penalties when comparing mortgages. Some mortgages will incur a penalty for prepayments, or for breaking a mortgage early.
Portability is another consideration. A portable mortgage is a mortgage that can be transferred from one home to another. Say you purchase a home but want to move before it's paid off. A portable mortgage makes it easy to transfer your existing mortgage over to your new property.
LowestRates.ca works with 75+ 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 current mortgage rates for Sherbrooke. 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.
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.
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.
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.