Clay Jarvis
Mary FloryCurrent Butler Mortgage rates
| Term | Rate |
|---|---|
| 6 months (fixed) | 4.09% |
| 1 year (fixed) | 5.59% |
| 2 year (fixed) | 4.89% |
| 3 year (fixed) | 4.09% |
| 3 year (variable) | 4.60% |
| 4 year (fixed) | 4.49% |
| 5 year (fixed) | 4.14% |
| 5 year (variable) | 4.35% |
| 7 year (fixed) | 4.99% |
| 10 year (fixed) | 5.09% |
Butler Mortgage at a glance
Butler Mortgage, an award-winning, Toronto-based mortgage brokerage, has been in business since 1997.
As it’s a brokerage, Butler Mortgage doesn’t provide its own mortgage products. Instead, it develops relationships with multiple lenders and uses those relationships — and the competition between lenders — to find borrowers lower mortgage rates.
Butler Mortgage prides itself on the number of its lender relationships and the brokerage’s ability to find home buyers the best mortgage rates.
Butler Mortgage products
Butler Mortgage offers a range of mortgage solutions, including:
- Residential mortgages, refinances and renewals.
- Home equity lines of credit.
- Purchase-plus-improvement and construction mortgages.
- Mortgages for vacation homes, second homes and investment properties.
Butler Mortgage also provides mortgage services for borrowers who might find mortgage affordability challenging, such as first-time home buyers, divorcees and newcomers to Canada.
Butler Mortgage: Things to consider
What is your employment situation?
If you’re like most Canadians, you probably think of a Big Six bank when you think of mortgage lenders. But not everyone can get approved for a mortgage at a chartered bank, where the qualification criteria can be quite strict.
If you’re self-employed, for example, traditional lenders may question whether you earn consistent enough income to maintain your mortgage payments. In these cases, it can be helpful to turn to a brokerage like Butler Mortgage, which deals with alternative lenders who are open to working with borrowers who have untraditional income sources.
Are you new to Canada?
If you’re a recent immigrant to Canada, you might have a limited Canadian credit history for banks to evaluate. That will make it difficult for them to approve you for a mortgage.
Butler Mortgage has relationships with alternative and private lenders that offer mortgages for newcomers. A brokerage with these lenders in its network may be the only option if you’re new to the country and hoping to buy a home.
How’s your credit?
Big Six banks might not approve your mortgage application if you have a low credit score or a few credit missteps in your past. These are red flags that signal risk.
Alternative lenders, however, can be a little more flexible in who they choose to loan their money to. A mortgage broker can help connect you with these financial institutions.
Fixed vs. variable mortgage rates
Whether you get your mortgage directly from a lender or from a brokerage like Butler Mortgage, you’ll have to make an important choice between getting a fixed or variable mortgage rate.
Fixed mortgage rates
With a fixed-rate mortgage, your interest rate will remain the same for the duration of your mortgage term. If Butler Mortgage offers you a 5.5% five-year fixed-rate mortgage in 2023, for example, your rate won’t change until it’s time to renew your mortgage in 2028.
A fixed mortgage interest rate allows you to budget around a predictable monthly mortgage payment for years at a time. But if fixed rates fall during your mortgage term, the only way to take advantage is by breaking your mortgage contract and refinancing at a lower rate. Doing so can trigger serious mortgage prepayment penalties.
Variable mortgage rates
If you opt for a variable rate on your mortgage, the rate could rise or fall many times during your term. When it rises, more of your monthly mortgage payment will go toward interest; when it falls, more will go toward the principal.
Variable mortgage rates have generally been lower than fixed rates. But in times of high inflation, when variable rates are driven upward by increases to lenders’ prime rates, variable rates can put unexpected pressure on your finances.
From March 2022 to July 2023, for example, homeowners with variable-rate mortgages saw their rates increase 475 basis points. (One percent is equal to 100 basis points.) That means a borrower who secured a variable rate of 2.25% in January of 2022 would be paying 7% in July 2023. That’s not a common occurrence, but it highlights the risk of taking out a variable-rate mortgage during times of economic uncertainty.
Other lenders’ rates
Once you’ve taken a look at Butler Mortgage’s rates, the next step will be to compare them to what’s on offer at Canada’s major lenders. You can see some of the fixed- and variable mortgage rates Canada’s Big Six banks are currently offering below.
| Lender | 3-year fixed rate | 5-year fixed rate | 5-year variable rate (closed) | 5-year variable rate (open) | Prime rate |
|---|---|---|---|---|---|
| TD Bank | 7.14% | 7.04% | 7.07% | 8.37% | 7.35% |
| BMO | 7.28% | 7.11% | 7.22% | N/A | 7.20% |
| RBC | 7.34% | 7.17% | 7.23% | 10.53% | 7.20% |
| Scotiabank | 7.24% | 7.04% | 7.65% | 10.40% | 7.20% |
| CIBC | 7.14% | 6.99% | 7.20% | 10.50% | 7.20% |
| National Bank of Canada | 7.14% | 7.08% | 7.24% | N/A | 7.20% |
If you want to investigate all the current mortgage rates the Big Six are offering, look no further:
- BMO mortgage rates.
- CIBC mortgage rates.
- National Bank mortgage rates.
- RBC mortgage rates.
- Scotiabank mortgage rates.
- TD mortgage rates.
How to get the best mortgage rate at Butler Mortgage
Whether you’re getting a mortgage directly through a major bank or a brokerage like Butler Mortgage, you’ll want to do all you can to ensure you’re offered the best mortgage rates.
That typically means presenting yourself as a low credit risk. You can often do that by:
- Raising your credit score. A high credit score tells lenders that you pay your debts on time.
- Making a larger down payment. If you can make a significant down payment, one that goes well beyond Canada’s minimum down payment guidelines, lenders might see that you prioritize home ownership — but they’ll definitely see that they can loan you less money.
- Lowering your debt service ratios. If your debt service ratios are high, it signals to lenders that too much of your income is already going toward paying down debt.
You can also try to get a lower mortgage rate by:
- Shopping around. If Butler Mortgage can’t find you a rate you’re happy with, take a look at the rates other brokers are offering and see if there’s a better one available to you.
- Negotiating: It’s part of a broker’s job to negotiate the best rate possible. Don’t be afraid to ask Butler Mortgage if they can improve on the rate you’ve been offered.
Getting pre-approved for a mortgage at Butler Mortgage
Getting pre-approved for a mortgage is a crucial step in the home buying process. A pre-approval tells you how much a lender is willing to loan you at a particular interest rate. This establishes your home buying budget and tells homeowners that your offer — so long as it falls within the limits of your pre-approval — is legit.
The mortgage pre-approval process at Butler Mortgage will involve providing all the documents lenders will require for evaluating your finances. This might include:
- Banking information that confirms your assets and down payment savings.
- A letter of employment.
- Pay stubs that demonstrate your income.
- Information related to any debts you have.
The mortgage pre-approval process will also include a hard credit inquiry, which allows the brokerage to assess your credit score and review your credit history. Hard inquiries may lead to a temporary dip in your credit score.
How to start a mortgage pre-approval at Butler Mortgage
Before you can start the pre-approval process at Butler Mortgage, you’ll have to speak to the brokerage first about your homeownership goals. You can either call directly or fill out a simplified contact form that will ask you to approximate both your credit rating and how much you expect to borrow.
What else should you know about pre-approvals at Butler Mortgage?
Once you’ve been pre-approved, it’s time to look at your mortgage offers closely. Make sure you understand the fees, terms and conditions involved with each one, including any prepayment privileges (and prepayment penalties). Getting clarity around these factors during pre-approval can make the next step — officially applying for a mortgage once you’ve made a successful bid on a home — go more smoothly.
Mortgage pre-approvals are free and non-binding. Just because you get pre-approved at Butler Mortgage doesn’t mean you can’t get your mortgage elsewhere. But if you get pre-approved at Butler and then decide to work with a different brokerage, you’ll have to go through the pre-approval process again.
Frequently asked questions about Butler Mortgage rates
Butler Mortgage is headquartered in Ontario, but it provides mortgages to borrowers across Canada.
When mortgage rates are high, working with a mortgage broker like Butler Mortgage might be the best way to find the lowest rates. Brokers can compare offers from multiple lenders and leverage their long-term relationships with these institutions to get you the lowest rate.
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