Find the best mortgage rates in British Columbia
Easily compare the best BC mortgage rates, all in one place.
Today's best mortgage rates in British Columbia
Mortgage rates in British Columbia
British Columbia is one of the hottest real estate markets in Canada, second only to Ontario. Over five million people live in this nature-rich province and the housing market attracts many foreign and interprovincial buyers alike. The Vancouver metro area has a dynamic and active housing market, just like the Greater Toronto Area (GTA).
A mortgage rate is the interest charged on a loan used to purchase real estate. This rate can be fixed (unchanging over the term of the loan) or variable (subject to change based on market conditions). The mortgage term depends on the borrower and their financial condition, ranging anywhere from six months to 10 years.
Mortgage rates in BC, like everywhere else in Canada, are influenced by economic factors such as the Bank of Canada’s policy interest rate, inflation, unemployment rate and the overall state of the Canadian economy.
How to use our British Columbia mortgage rates table
Our British Columbia mortgage rates table can help you get the best rate in six easy steps:
Understanding your British Columbia mortgage rate
Securing a mortgage for a home in British Columbia is likely one of the most significant financial decisions you'll make. A deep understanding of your mortgage rate and how it will impact your financial situation is crucial, as it influences various aspects of your homeownership journey:
- Financial planning: Your mortgage rate, whether fixed or variable, open or closed, plays a crucial role in your long-term financial decisions. A detailed analysis of the mortgage rate allows you to create accurate monthly and annual budgets, plan for future expenses and savings, and assess the impact of your mortgage on other financial goals. By fully comprehending your rate, you'll be better equipped to maintain financial stability throughout your mortgage term.
- Cost of borrowing: Understanding your rate helps you gauge the real, long-term cost of your BC property. Your mortgage rate directly impacts your total cost of borrowing, as even a slight increase or decrease can affect the interest you pay to the bank, or through the life of the loan.
- Rate comparisons: Comparing mortgage rates offered by different lenders can allow you to differentiate mortgage products more effectively, as you’ll know what best suits your needs. Flexible benefits like no prepayment penalties can really be a gamechanger.
- Risk assessment: Economic volatility like inflation or BoC rate changes can have an impact on your financial risk appetite. This is crucial if you have a variable rate, as each rate increase or cut impacts your monthly payments and amortization. Even if you’re locked in at a fixed rate, high interest rates can affect your renewal rates and your home value if you’re looking to refinance.
- Negotiation leverage: By understanding your mortgage rate better, the factors that affect them can allow you to negotiate the terms with your lender.
Remember, your mortgage rate is more than just a number. It is a key factor in your overall homeownership experience in BC. Take the time to understand it thoroughly, and do not hesitate to seek advice from a professional mortgage broker.
How can I get the lowest mortgage rate in British Columbia?
The following simple steps can help you get the lowest mortgage rate in British Columbia:
1. Improve your credit score: There are many ways to get your credit score on track. Pay all your bills on time, lower debt and check for errors on your credit report. Remember to keep credit card spending at 30% of your limit to have a good credit score.
2. Higher down payment: By making a 20% down payment or more can mean better rates and no mortgage insurance. You save on insurance premium for the lifetime of your mortgage, saving you thousands of dollars in the long run.
3. Comparison shop: Shopping around to compare mortgage rates from different banks, credit unions and mortgage brokers can help you find the best deal.
4. Negotiate: Use other bank’s offers to haggle for a better rate – even a small difference can save you a lot of money in the long term.
5. Use a mortgage broker: A mortgage broker can help you find hidden deals and negotiate on your behalf with the financial institution. It’s in your best interest to identify a mortgage broker who caters to your needs.
6. Analyze the market: Watch the mortgage market trends, economy, inflation and other factors that can impact your mortgage rate and apply for a mortgage loan when rates are considerably low.
7. Consider all the features: Always ask your mortgage provider about additional perks like prepayment options or mortgage loan portability. These features come in handy when you really need it.
8. Strengthen your finances: By lowering debt, increasing your overall income or picking a property within your budget, you can look more attractive to lenders.
9. Lock in a rate: If rates might go up soon, get a rate hold for 90-120 days while you shop around.
10. Choose the right mortgage type and term: Decide between fixed or variable rates and consider how the term length affects your rates, monthly payments and renewal frequency.
Differences between fixed rate mortgages vs. variable-rate mortgages in British Columbia
A fixed mortgage rate remains the same or “fixed” for the entire term of the mortgage, regardless of changes in the Bank of Canada policy rates. The one factor that impacts fixed rate the most is Canadian bond yields. Your mortgage payments will be consistent throughout the fixed term.
Pros
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Predictability: You do not have to worry about changing your financial budget as the payments remain unchanged even if the Bank of Canada changes policy interest rate.
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Security: With a fixed rate, you can remain unaffected if the interest rate rises over a period of time. This is beneficial in a high or rising rate environment.
Cons
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Higher rate: Initial fixed mortgage rates typically exceed variable rates because borrowers are paying extra for rate stability and safeguarding against potential increases.
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Penalties: If you break a fixed mortgage midway, you might have to pay higher penalties to the lender than variable-rate mortgages.
A variable mortgage rate changes with the lender's prime rate, which is influenced by the Bank of Canada's policy interest rate. Depending on the type of variable rate, your monthly payment amount will stay the same, but the proportion of your payment towards interest vs. principal can change over the length of the mortgage.
Pros
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Flexibility: In case of inflation falling and BoC policy interest rate going down, you can benefit from it. Even as your mortgage payment stays fixed, the interest you pay over time decreases with the falling interest rate.
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Can access lower rates: Variable rates are often lower than fixed rates initially, potentially saving money if interest rates remain stable or decline.
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Lower penalties for breaking the mortgage early: Generally, the penalty for breaking a variable rate mortgage is lower than for a fixed rate mortgage.
Cons
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Uncertainty: Your interest rate can increase due to economic situations like inflation, leading to higher payments towards interest or a longer amortization period if your payments don’t cover the interest portion.
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Financial hurdles: Unexpected increase in monthly cost due to changing interest rates can impact your monthly budget, particularly during rate hikes.
Other popular mortgage types in British Columbia
- Adjustable-rate mortgages (ARMs): Adjustable-rate mortgages or ARMs are a type of variable mortgage rate where the interest rate can change periodically over the loan term. Unlike fixed-rate mortgages, the interest rate can fluctuate based on market conditions and so can your monthly payments. ARM borrowers may have limits on how much the rate can increase or decrease in a single adjustment and over the loan term. It is important to factor in the risk of a substantial increase if British Columbia mortgage rates spike. You must have significant financial back up in case things go awry with the rate. For instance, one such ARM offering is Scotiabank’s Flex Mortgage.
- Hybrid mortgages: Hybrid mortgage is a great product for anyone who wants to mitigate and spread the risk in times of rate fluctuations. Hybrid mortgage divides the loan amount into various segments, each with its own rate type (fixed, variable or adjustable). You can spread the risk amidst fluctuations in interest rates with this mortgage product. It offers the stability of a fixed rate and the cost savings of variable interest rate. Hybrid mortgages can be detailed, so it's important to fully understand the terms and conditions outlined in your mortgage contract. A good example of such a mortgage product is Meridian Credit Union’s Hybrid Mortgage.
How are British Columbia mortgage rates determined
Here’re all the factors that affect British Columbia mortgage rates.
Besides these common factors that impact mortgage rates in British Columbia, the specific rate you get will also depend on personal finance factors such as salary, credit score, down payment, amortization period and the type of mortgage (fixed or variable).
British Columbia’s current housing market
The Canadian housing market has seen turbulent times since the Bank of Canada began increasing its policy interest rate in March 2022. Until July 2023, the central bank had increased its policy interest rate almost 10 times. Borrowers and first-time homebuyers in British Columbia waiting on the sidelines for a rate cut could only see some respite in June 2024, when the bank cut rate by 25 basis points for the first time in two years. The Bank has cut 75 basis points so far this year, giving some respite to home buyers and more rate cuts are on the horizon.
The British Columbia Real Estate Association sees this as a sign for improvement in housing market activity as both variable and fixed mortgage rates are falling. According to BCREA, the total sales dollar volume of residential unit sales in August 2024 was $5.6 billion, an 11.5% decline from the same time last year. British Columbia MLS residential unit sales were also 22% lower than the 10-year average for August.
The average price for a residential unit in BC in August 2024 was down 1.7% at $938,500 compared to an average price of $955,063 in August 2023. Areas that saw a slight increase in August residential average price are BC Northern, Chilliwack, Fraser Valley, Okanagan, Kootenay and Vancouver Island. While other regions that saw a decline in residential average price are Victoria, Greater Vancouver area, Powell River, South Peace, Kamloops, and the overall provincial total residential sales price was also low in August 2024, compared to last year. Reportedly, there’s been a 3.3% decline in year-to-date BC residential sales dollar volume to $50.8 billion, compared with the same period in 2023.
Types of mortgage lenders in BC
1. Banks
In British Columbia, as in the rest of Canada, the banking landscape is characterized by six major national banks. The mortgage lending products available in the market are provided by a mix of these national banks and some regional institutions. Here are the most popular banks that provide mortgages in BC:
- Royal Bank of Canada (RBC): RBC is one of the largest banks in Canada with over 17 million clients worldwide. RBC offers a range of mortgage products, including fixed and variable-rate mortgages, early prepayment options, along with specialized products for first-time homebuyers and foreign investors.
- Toronto-Dominion Bank (TD Bank): TD Bank is the second largest bank in Canada, after RBC, and offers a variety of mortgage solutions, including fixed and variable-rate mortgages, as well as home equity lines of credit (HELOC).
- Bank of Montreal (BMO): BMO is Canada’s oldest bank and offers highly competitive mortgage rates and options. This includes fixed and variable-rate mortgages, along with special products for first-time homebuyers.
- Canadian Imperial Bank of Commerce (CIBC): Besides the regular fixed and variable-rate mortgage products, CIBC offers programs for first-time homebuyers, newcomers to Canada, as well as a Home Power Plan that combines a mortgage with a line of credit.
- Scotiabank: Founded in 1832, Scotiabank is one of the oldest banks in Canada. Scotia also offers the staple fixed, variable-rate and adjustable-rate mortgages. They also provide the Scotia Total Equity Plan (STEP), allowing homeowners to utilize their home equity to reduce borrowing costs.
- National Bank of Canada (NBC): The National Bank of Canada recently acquired the Canadian Western Bank to strengthen its presence as a systemically important bank in the country. It offers mortgage products in British Columbia, including fixed and variable-rate mortgages, along with offers for first-time homebuyers.
- Tangerine: Digital-only banks like Tangerine, owned by Scotiabank, and Simplii Financial, owned by CIBC, are also available to BC borrowers. Tangerine offers various mortgage products like new mortgage rates, refinance options, and annual mortgage prepayment option as well.
2. Credit unions
British Columbia’s strong credit union sector makes it a very viable mortgage borrowing option for homebuyers. Some notable institutions include:
- Vancity: Founded in 1946, Vancity is the largest credit union in BC and one of the largest in Canada. Vancity provides different mortgage options and has special home loan product for buying land in First Nation communities.
- Coast Capital Savings: Another major credit union based in BC, Coast Capital Savings is a viable option for seeking a mortgage for BC home buyers. A major part of Coast Capital’s portfolio is its mortgage product and you will find a suitable product whether you’re buying your first home, renewing an existing mortgage, or switching your mortgage over to Coast Capital. Furthermore, homebuyers may be eligible for a cash bonus of up to $1500 when they switch to Coast Capital.
- First West Credit Union: Another great credit union option for BC homebuyers is the First West Credit Union that operates under local brand names like Envision Financial.
3. Trust Companies
Trust companies are financial institutions that offer services similar to banks but with a focus on managing assets for individuals, estates, and businesses. They often specialize in mortgages, estate planning, wealth management and acting as trustees. Here are some of the regulated Trust companies in BC:
- All Nations Trust Company
- Central 1 Trust Company
- Citizens Trust Company
- Coda Trust Company Ltd.
- CV Trustco Inc.
4. Mortgage Investment Corporations (MICs)
A Mortgage Investment Corporation (MIC) is a way for investors to participate in the real estate market without directly buying property or individual mortgages. Foreign or domestic investors can buy shares in the MIC, which then uses this pooled money to invest in a portfolio of mortgages. The MIC may also borrow additional funds from banks or other lenders to increase its investment capacity. MICs are created under Section 130.1 of the Canadian Income Tax Act, which gives them special tax treatment. Some of the popular Mortgage Investment Corporations in BC are:
- Alta West Capital, based in Calgary, Alberta, focuses on primarily residential mortgages in Western Canada and is known for short-term, higher-yield mortgages.
- MCAN Financial Group, publicly traded on Toronto Stock Exchange, services residential and commercial lending, as well as portfolio investments. It operates as both a MIC and a loan company.
- Atrium Mortgage Investment Corporation is also publicly traded on Toronto Stock Exchange. It focuses on commercial and residential mortgages in major urban centers and with emphasis on lower-risk mortgages with a focus on income generation.
- Canguard MIC, based in BC, focuses on primarily residential mortgages in BC’s lower mainland and is known for its conservative lending approach.
- AP Capital MIC, headquartered in Vancouver, focuses on short-term residential mortgages in urban markets across Western Canada. It targets higher-yield opportunities while managing risk.
5. Private Lenders
If you are looking for unconventional ways for borrowing a mortgage loan, look no further than private lenders. These are individuals or firms providing personal loans, including mortgages, especially to borrowers struggling to secure financing through conventional methods like a bank or financial institution.
While private lenders may offer mortgages with more lenient qualification criteria, they usually charge higher interest rates and fees to compensate for the risk they might take on.
Some private lenders available in BC are:
- Fisgard Asset Management Corporation
- AP Capital MIC
- Vector Financial Services
- Canguard
- Waskor Mortgage Group
Understanding the impact of rate hikes on monthly mortgage payments
Due to the Bank of Canada policy interest rate hikes that began in March 2022, many borrowers and first-time homebuyers in British Columbia have been waiting on the sidelines for a rate cut to be able to afford a home. Thankfully, the central bank decided to bring down the rate by 75 bps this year and further cuts are expected. But if you are going to buy a home, you must factor in future rate hikes and how it may impact your monthly payments.
For instance, the lowest five-year mortgage rates available in British Columbia is around 5%, and only a few years back they stood around 2.5%.
Let’s see how the rate hike would have impacted a $400,000 home using our British Columbia mortgage calculator.
If you had put 20% down ($80,000) on a five-year fixed rate mortgage for a $400,000 home five years ago. At 2.5%, your bi-weekly mortgage payment would have been $716.75.
Five years later, you’d end up paying $56,837.67 towards your principal, lowering your total amount owing to $261,662.33 with 20 years left on the term.
At a 5% rate of interest, your bi-weekly mortgage payment jumps to $859.73, or an extra $285.92 per month upon renewal. This is why it is important to have a long term plan when it comes to securing a mortgage type and term.
Using our British Columbia mortgage calculator, you can see how different rates affect your mortgage monthly payments.
Understanding your BC mortgage closing costs
Ready to find the best BC mortgage rate?
For home buyers — first-timers or investors — who want the best value out of their real estate, British Columbia is a great investment. BC attracts immigrants, foreign investors, students and working professionals alike because of its natural beauty and weather. It is a great place to live and raise a family in North America, and by all means has a lot to offer. Owning a home in BC could be a dream come true for anyone. But as a buyer, you can’t be emotional when making a financial decision. You must weigh all options, consult a professional real estate agent, mortgage broker and lawyer to get the right guidance when investing in a home. Comparison shop mortgage rates using our rate table to get the rate best suitable to your financial needs
Shivani Kaul is a seasoned freelance writer and editor specializing in insurance, mortgage, and finance.
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