World News – CA – Less than 1% mortgage rate is now available in Canada

How would you like a mortgage with an interest rate of less than one percent? This is what HSBC, Canada’s seventh largest bank by assets, is now promoting.

The lender’s website now shows they are offering a new five year variable mortgage rate with a staggering low of 0. 99 percent. It marks a first in Canadian history in terms of bank-advertised interest rates, according to veteran mortgage broker Robert McLister.

“This is a milestone rate that is similar to landmark rates like BMOs 2. 99 percent 5 year fix in 2012 and Meridian Credit Union 1. In 2015 it was set at 49 percent, « said McLister, mortgage editor at Rates. ca and founder of the rate comparison website RateSpy. com wrote in a blog post about the new HSBC offering.

The rate corresponds to a discount of 1. 46 percent on HSBC’s current base rate of 2. 45 percent. The base rate is the rate that banks and other financial institutions use as a benchmark to set a variety of their loan rates, including floating mortgage rates. Lenders tend to adjust their policy rate based on the Bank of Canada policy rate, which was zero. 25 percent since the end of March.

The new 0. The 99 percent mortgage rate is floating, which means it could go up if Canada’s central bank raises its rate and HSBC catches up with its own policy rate.

But the Bank of Canada has pledged to keep interest rates low through 2023, a pledge designed to keep borrowing and stimulate economic activity amid the novel coronavirus pandemic.

There are some limitations, however. HSBC limits the offer to so-called high-ratio mortgages with a down payment of less than 20 percent. And the bank warns that a higher interest rate could apply to unused real estate, depreciation over 25 years and exemptions from its standard credit guidelines.

The 1. The five-year fixed rate of 39 percent mentioned by McLister is also available from HBSC and is only available for high-rate mortgages.

However, the penalty for breaking adjustable rate mortgages is three months of interest, which is usually cheaper than what many banks charge borrowers on fixed rate mortgages.

The 0. A 99 percent mortgage also allows you to make a lump sum advance payment of up to 20 percent per year. According to RateSpy, borrowers can increase their regular payments by up to 20 percent per year with no penalty or pay up to twice their normal rate on each regular payment date. com.

Simplii’s 1 is one of the other variable rate mortgages available nationwide with a term of five years. 65 percent interest rate on high rate mortgages and Tangerine’s 1. According to McLister, the interest rate on uninsured mortgages is 7 percent.

Both variable and fixed mortgage rates have decreased along with short and long term rates since the pandemic began.

In a number of markets, home sales remain strong in November – usually a slow month for real estate. Despite the weakness in the condominium market, sales from existing properties rose nearly 23 percent year-over-year in Metro Vancouver, 24 percent in the greater Toronto area and 32 percent in the Montreal metropolitan area.

Mortgage Loans, Fixed Rate Mortgage, RateSpy. com, interest rate