Find the best Victoria, BC mortgage rates

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Current mortgage rates in Victoria, BC

Comparing mortgage rates in Victoria

A world-class city with a classic European charm, Victoria may be small in size, but has emerged as one of British Columbia's most desirable real estate markets.

Just 100 kms from Vancouver and located on the southern tip of Vancouver Island, Victoria boasts of a thriving economy and vibrant arts and cultural scene. The city is home to some of the top universities in the country and attracts tourists in huge numbers due to its favourable weather, standard of living and quality of life. 

The city has 12 distinct neighbourhoods, from the historic James Bay to the bustling downtown core, each offering unique housing opportunities. 

Victoria has seen a 2.19% population growth, with 423,136 calling Victoria home, making it the 15th largest  metropolitan area in Canada. 

The technology sector, government services and tourism form the backbone of Victoria's economy, contributing to steady housing demand.

Owing to its popularity and high average housing costs, homeowners in Victoria have access to all the big Canadian banks and credit unions. 

The benchmark price of an average townhome in Victoria in October 2024 was $871,700, which is significantly higher than most BC cities, according to CREA. 

Mortgage lenders are often vying for business from high-affordability home owners and offer competitive lending rates. However, the ideal mortgage term and rate structure depends heavily on individual circumstances, including down payment size, income stability and long-term financial goals.

How to get the best mortgage rate in Victoria

To get the best mortgage rate in Victoria, BC, you need to work on a combination of personal finance factors and extensive research. Here are some steps you can take to improve your chances of getting a favourable mortgage rate:

• Improve your credit score: Your credit score is a critical indicator of your financial health. A higher credit score (700+) can help you qualify for lower mortgage rates. Pay all your bills on time, reduce debt levels and double-check your credit report for errors to improve your score. Avoid applying for new credit cards or other financial products that involve a hard check on your credit. Keep your credit utilization ratio at 30%. Paying the bill off in full each month is ideal and avoids interest charges

• Save for a larger down payment: A lender will often provide a better rate to someone who poses lesser risk to them. The more money you put down upfront, 20% or more of the total selling cost at least, can help you avoid paying for mortgage default insurance and qualify you for better rates.
• Shop around: Different mortgage lenders offer different rates. Competition is high among mortgage providers, so don’t settle for the first mortgage offer you get. Compare rates from different lenders, including banks, credit unions and mortgage brokers. Each lender may offer unique rates and terms, so shopping around will help you get the deal best for you.
• Negotiate: Negotiation is a great way to improve the rate offered by a lender. Don’t be afraid to negotiate and use offers from other lenders as leverage to get a better rate. Even a small difference in the interest rate can result in significant savings over the mortgage term.
• Use a mortgage broker: A mortgage broker has access to a wide range of lenders and can offer rates that may not be publicly advertised. A mortgage broker will negotiate on your behalf and help you find the best rate based on your financial situation. 
• Time your mortgage: Keep a tab on the condition of the economy as interest rates fluctuate with the Bank of Canada’s policy interest rate decisions. Monitor the market trends and try to apply for a mortgage when rates are lower. If you can’t wait, reach out to a broker to help you find the best rate and terms available.
• Consider all the mortgage features: Ask lenders for features such as prepayment privileges or the ability to port your mortgage, which can save you money or offer flexibility. 

• Strengthen your financial health: Lenders look at your debt-to-income ratio to determine your mortgage repayment ability. Improve your financial situation by lowering your debt, increasing your income or choosing a property within your budget that can make you a more attractive borrower.
• Get mortgage pre-approval: If you anticipate future rate hikes, consider getting a rate hold, where a lender guarantees a certain interest rate for a specific period (usually 90 to 120 days) while you shop around.
• Consider the mortgage type and term: Don’t prejudge which mortgage rate or type would be best for you without doing your due diligence. Decide whether a fixed or variable-rate mortgage suits your situation best. While fixed rates offer stability, variable rates can change with economic conditions. The term length also affects your rate; shorter terms sometimes have lower rates but require more frequent renewals, when rates could be higher.
  

Closing costs in Victoria, BC

There are some essential costs you incur when purchasing a home in Victoria. When budgeting for your home purchase, remember that your down payment isn’t the only cost to consider at the time of closing. Here are some of the key closing costs you will have to plan for during your purchasing journey:

1. 1.

   Legal fees: A legal professional or lawyer will be required to assess your property title search and arrange for property surveys if needed and other various other legal disbursements. Expect legal fees to range between $1,000 and $2,000.

2. 2.

   Mortgage-related costs: If you have a downpayment of less than 20%, you’ll have to pay mortgage insurance until the end of your loan period. CMHC insurance premiums can range from 2.4% to 4% of the loan amount, on top of a mortgage application fee.

3. 3.

   Home insurance: All lenders require  homeowners to have home insurance. This must be arranged before closing. This can cost you anywhere between $1,000-$3,000 annually. 

4. 4.

   Home inspection: A professional assessment of the property’s condition may cost between $300 to $600 depending on the size of the property. Even though it’s highly recommended for all purchases, it’s not mandatory. This inspection can help identify potential issues with the house that could require costly repairs.

5. 5.

   Property Transfer Tax (PTT): This provincial tax is based on the property’s fair market value, and in Victoria, a buyer will have to pay 1% on the first $200,000 of fair market value and 2% on the remaining balance. First-time home buyers may get some exemption on paying this tax depending on the federal or provincial rules.

6. 6.

   Goods and Services Tax (GST): At present, a GST of 5% is applicable on the purchase price of all newly built homes. Resale residential homes are exempt from this tax.

7. 7.

   Moving costs: Professional movers can be costly, especially if you’re moving from a far distance or already have a home filled with belongings. Shop around to find the best deal but, when it comes to choosing someone to move your possessions, this isn’t an area you want to cheap out on. Expect to spend a minimum of $350, and that’s if you live close to where you’re moving and don’t have a lot to move. Movers can easily run you $1,000+.

8. 8.

   Utilities: Don’t forget to factor in the cost of transfer and/or connection fees for utilities like phone, internet, hydro and gas, among other utilities. 

Your realtor and mortgage broker can provide all of the information you need to consider to make sure you’re well prepared to absorb the additional costs you can expect to pay at closing.

Rebates for Victoria’s first-time home buyers

First-time home buyers are already facing a challenging housing market and should take advantage of all of  the exemptions or discounts they possibly can when buying a home.

Provincial programs

• The B.C. First Time Home Buyers Program: Allows a home buyer purchasing their first home to get a maximum exemption of up to $8,000 on PTT. A full exemption of PTT is applicable for buyers purchasing a home of up to $500,000, while a partial exemption is applied to homes of $500,000 to $835,000. To access this exemption, you must be a first-time home buyer, a Canadian citizen or permanent resident, a BC resident for over 12 months or  filed at least two tax returns in the province in the last six years. The eligible buyer can not have owned a property elsewhere in the world, and will not be eligible if they have received this tax exemption before.
• BC Home Owner Grant: Allows eligible home buyers annual property tax reduction of $570 in Victoria, Metro Vancouver and Fraser Valley and up to $770  elsewhere in the province, on homes valued under $2,125,000. The grant is not exclusive to first-time home buyers and can be accessed by other home buyers, as well. 
• Newly Built Homes Exemption: A first-time home buyer who purchases a new construction home up to $1.1 million that sits on 1.24 acres or less, can access this exemption on property transfer tax. There is a partial exemption for first-time home buyers on property transfer tax for homes between $1.1 million and $1.15 million on larger lots.
  

Federal programs

• Home Buyer’s Plan: Across Canada, a first-time home buyer can withdraw up to $60,000 from their RRSP without any tax impact, with a condition to repay the withdrawn amount within 15 years. The eligible buyer must be a first-time home buyer and must be purchasing their principal residence.
• First Home Savings Account: This savings account can be used by first-time home buyers to pay for their down payment. It offers tax-free investment growth, tax-deductible contributions to bonds, stocks and GICs that may allow you to multiply your savings. There is an annual contribution limit of $8,000 and lifetime maximum saving contribution of $40,000.
• First-Time Home Buyers’ Tax Credit: This tax credit helps eligible buyers offset the first-year of ownership costs and results in up to a $1,500 tax rebate and $10,000 non-refundable tax credit.
• GST/HST New Housing Rebate: First-time home buyers can benefit from a partial rebate of the GST/HST they paid on eligible property. Rules for this rebate may vary by property type and location and is only available for new construction homes.
  

Frequently asked questions about Victoria mortgage rates

Shivani Kaul Writer

Shivani Kaul Writer

Shivani Kaul is a seasoned freelance writer and editor specializing in insurance, mortgage, and finance.

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