Newfoundland Mortgage Rates (Updated Daily)

Rates updated: December 30, 2024

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Disclaimer: The rates displayed do not include any taxes, fees, insurance, or other additional charges. These rates are estimates and are not guaranteed. The actual rate and loan terms you receive will depend on our partner’s assessment of your creditworthiness, loan amounts, and other relevant factors. Please note that any potential savings figures provided are estimates based on the information you and our advertising partners have provided. Terms and conditions apply.
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Newfoundland mortgage rate update: December 2024

The Bank of Canada delivered an early Christmas present for Newfoundland’s variable-rate mortgage fans on December 11, when it reduced its overnight rate by 50 basis points. When the rate cut is absorbed by lenders, variable rates should decrease by 0.5%.

That will bring the lowest advertised variable rates down to around 4.3% at some mortgage brokerages. Variable rates remain closer to 5% at the country’s biggest banks. Another rate cut could be in the cards for January, when the Bank is scheduled to make its next overnight rate announcement.

Fixed rates aren’t quite as exciting these days. Even though bond yields, which determine fixed mortgage rates, have cratered over the past several weeks, lenders haven’t lowered their fixed rates in response. Canada’s lowest advertised five-year fixed rates are currently around 4.15%.

Shorter-term fixed rates, the option of choice among many recent home buyers, will cost you a little more. (That’s the unfortunate result of higher demand.) Two-year terms might cost 4.89% or more, while one-year terms are closer to 6%.

Historical trend: New mortgage loans in Newfoundland

The average mortgage rate in Newfoundland

There isn’t a single average mortgage rate for Newfoundland and Labrador. Even if you could access all the current mortgage rates on offer, it wouldn’t be much help. That’s because any mortgage offer you receive is always specific to you. Lenders take into account multiple factors, such as credit score, the type of mortgage and the amount needed.

Think about the “average mortgage rate” the way you would average home price. It’s interesting data to have, but it’s not necessarily relevant to your own home buying journey.

2025 Newfoundland mortgage rate forecast

Variable mortgage rates

After the Bank of Canada’s fifth consecutive overnight rate cut on December 11, 2024, variable mortgage rates were down 1.75% since June. That’s a lot of action from a central bank with a conservative reputation.

The Bank likely won’t be as aggressive in 2025, as it has to wait for its most recent cuts to work their way through the economy. The overnight rate might decrease by another 50 basis points in the first half of 2025, which would bring variable mortgage rates down by another 0.5%.

Fixed mortgage rates

Because they’re determined by the government bond market, which is driven by investors’ decisions, fixed mortgage rates can be difficult to project over the long-term.

The mortgage brokers NerdWallet spoke to at the end of 2024 all expect fixed mortgage rates to remain relatively static for the next several months. That assumption, however, flies in the face of evidence from the government bond market. Bond yields, which determine fixed mortgage rates, cratered for three weeks straight starting on November 21. When yields fall consistently, it gives lenders the wiggle room to lower their fixed rates.

So, fixed rates could fall to begin the year, but lenders might keep them at current levels for a strategic reason: Lower fixed rates might entice home buyers away from the more expensive variable-rate mortgages they’ve been gobbling up to end 2024.

Newfoundland housing market update: December 2024

After receiving a major boost in October, home sales in Newfoundland and Labrador jumped 37.5% moderated in November, according to the Newfoundland and Labrador Association of Realtors. The 536 units sold was almost 21% below the ten-year average for the month. Year-to-date, sales were 5.5% higher than in the first 11 months of 2023.

The average sale price in the province, $330,683, was up 11.4% year-over-year. You can thank low supply for putting upward pressure on prices: active listings were down 21% from November 2023 and 40.2% below the the ten-year average for the month.

Newfoundland home sales and price forecast

Many Canadians wonder how the Bank of Canada’s rate cuts will affect the housing market. Will it compel buyers who have been cautiously watching from the sidelines, or will they continue to wait, hoping that rate cuts are just getting started? These are the questions real estate experts — and home buyers — will be watching through the end of 2024.

A report released by real estate company Royal LePage forecasts home prices increasing 9% in the last three months of 2024 compared to the same period in 2023. A report from the Canadian Real Estate Association stated that listings are up this summer compared to 2023 but still below historical averages.

Newfoundland first-time home buyer programs

First-time home buyers who’ve already been pre-approved for a mortgage can apply to a government program to receive grants of up to $1,500 plus a repayable loan of up to 5% of the home’s purchase price. The interest rate on the loaned amount is capped at the prime rate minus one percent, which is likely to be less than market rates. To be eligible, your household income can’t exceed $95,000, and your home price must fall under the limit, which varies by location.

Land transfer taxes in Newfoundland

Newfoundland doesn’t have land transfer taxes, but you’ll pay a fee to register your mortgage. The fee is $100 plus $0.40 for every $100 of your home’ value above $500.

Calculators to inform your home buying decisions

Mortgage Payment Calculator

Mortgage Affordability Calculator

Closing Costs Calculator

Guide to Newfoundland mortgage rates

Types of lenders in Newfoundland

Mortgage lenders in Newfoundland tend to fall into four categories, which include:

Large chartered banks such as Scotiabank, RBC and TD.
Credit unions such as Venture Credit Union and Atlantic Edge Credit Union.
B lenders that work with borrowers with lower credit scores, such as MCAN and Equitable Bank.
Private lenders, who typically deal with borrowers in need of short-term funding.

Types of mortgages in Newfoundland

Fixed-rate mortgages

The interest rate stays the same for the duration of the mortgage term in a fixed-rate mortgage, even if the market fluctuates. Fixed rates typically:

Are higher than variable interest rates.
Provide a greater sense of certainty. You can count on it remaining stable for the length of the mortgage term.

Variable-rate mortgages

Variable mortgage rates increase or decrease whenever your lender’s prime rate increases or decreases. Variable-rate mortgages typically have rates that:

Can be lower than fixed rates at the time you apply for mortgages. Variable rates can save borrowers money over the length of their mortgage — but only if rates remain the same or fall.
Can increase throughout a mortgage term. When interest rates go up, the monthly payment on a variable-rate mortgage can become more expensive.

» MORE: The difference between fixed- and variable-rate mortgages

Hybrid-rate mortgages

A portion of your mortgage is subject to a variable rate and another portion is at a fixed rate of interest. These mortgages:

Can dampen the impact of fluctuating interest rates in a particularly turbulent or uncertain economy.
Tend to be more difficult to transfer between lenders.

Insured and uninsured mortgages

If you buy a home for under $1 million, and your down payment is under 20%, you must insure your mortgage. Mortgage insurance adds to the cost of your loan. The cost of insurance equals a percentage of your mortgage, and the percentage depends on your down payment. The closer it is to 20%, the smaller your insurance payment is.

Homes worth $1 million or more require a down payment of at least 20%, so insurance is not required.

Short-term and long-term mortgages

Short-term mortgages last five years or less. Long-term mortgages last over five years. With a shorter mortgage, you’ll need to renew sooner, which can provide flexibility. Short-term mortgages often have lower interest rates than long-term mortgage rates.

Closed and open mortgages

The primary difference between closed and open mortgages is that you can pay off an open mortgage whenever you like and not pay a penalty. If you have a closed mortgage and make additional payments, you’ll generally be penalized.

Closed mortgages often offer better rates than open mortgages. But open rate mortgages may be a good option if you think you may be able to pay off your mortgage early.

» MORE: Open vs. closed mortgages

How Newfoundland lenders determine mortgage rates

The mortgage rate you’re offered by a lender in Newfoundland will be based on two primary factors; one depends on the state of the economy, the other on your financial situation.

Economic factors

Variable mortgage rates are influenced by the Bank of Canada’s overnight rate. When the overnight rate increases or decreases, a lender’s prime rate follows suit. Variable mortgage rates are based on a lender’s prime rate, so as the prime rate rises or falls, so do variable rates.

Fixed mortgage rates are determined by activity in the government bond market, particularly the yields on one-, three- and five-year bonds. Fixed mortgage rates follow the movement of those yields.

Your financial situation

Factors specific to you also affect the rates you’re offered. These include:

Your credit score.
Your income.
Your total debts.
The loan type you choose.
The amount you’re borrowing.
The term length and amortization period of your loan.

Lenders look for signs of risk when assessing these aspects of your finances. The riskier they perceive you to be as a borrower, the higher the rate they’re likely to offer you.

How to qualify for a lower mortgage rate in Newfoundland

Some factors behind rates are beyond your control, but there are steps you can take to possibly qualify for the best mortgage rates. For example, you can:

Improve your credit score. A higher credit score generally results in better offers. Get a better score by eliminating existing debt and paying future bills in full and on time.
Increase your income. It’s not always easy, but any additional income will improve your financial position. Lenders look at your income to assess your ability to afford a mortgage.
Decrease your total debts. Pay down personal loans, student loans or other types of debts. Lenders consider your total debt load when determining the details of your loan.
Consider all your options. See if adjusting the loan type, the term length or the amortization period of your loan could help.

Factors that affect mortgage affordability in Newfoundland

A home’s price and the rate you’re offered aren’t the only factors that affect how much mortgage you can afford. You’ll also have to account for the following components, which play a role in all mortgages.

Debt service ratios

Lenders use debt service ratios to determine how much of your income goes toward paying debt. If those ratios are too high, you may not qualify for the mortgage amount you need.

Car loans, credit cards and lines of credit are all examples of debt that require regular payments. Decreasing some of these balances, or relying less heavily on credit, can help you lower your debt service ratios.

The mortgage stress test

You will have to pass the mortgage stress test if you want a home purchase funded by a federally regulated financial institution.

The rules of the stress test say you must qualify for a mortgage at a minimum qualifying rate of either 5.25% or the rate you’re offered plus 2%, whichever is higher. If a lender offers you a rate of 5%, for example, you’ll have to demonstrate you can afford the same mortgage at 7%.

You may be able to avoid the stress test if you apply for a mortgage with a lender that is not federally regulated, like a credit union.

Your down payment

Your down payment is a critically important factor in determining mortgage affordability. The more you can put down, the less you’ll need to borrow. Your monthly mortgage payment will likely be smaller, and you’ll pay less in interest.

Mortgage term

The term is the length of time your mortgage contract is valid. In Canada, mortgage terms can run anywhere from six months to as long as 10 years.

Chances are that your mortgage will have multiple terms during the amortization period until you pay it off in full. Once your mortgage term ends, you can pay your loan off in full, renew it or refinance it.

Amortization period

A mortgage’s amortization period is the time it will take to pay off the loan in full. In Canada, the most common amortization period is 25 years. If your down payment is less than 20%, you can’t have an amortization beyond 25 years.

If your down payment is greater than 20%, you may find some lenders willing to offer amortization periods of up to 35 years.

Why would you want a longer amortization period? The longer your mortgage lasts, the smaller your monthly payment will be. You’ll pay more in interest, but that might be a worthwhile trade-off if it helps you keep your home.

How to compare mortgages from Newfoundland lenders

Use APR for greater accuracy

The annual percentage rate (APR) includes fees and closing costs the lender may charge in addition to the interest rate. A lender offering the lowest rate may actually have a higher APR due to those additional costs. Comparing APRs is the easiest way to see the complete cost of each offer.

Compare similar mortgages

For a comparison to be useful, the mortgages should have the same term, amortization period and payment frequency.

When looking for the best mortgage rates in Saskatchewan, also consider:

Mortgage type.
Ease of application.
Prepayment penalties.
Customer service.
Any other fees not included in the APR.

You can also compare mortgage rates in other provinces to get a sense of how the rate you’ve been offered in Newfoundland and Labrador stacks up:

B.C. mortgage rates

Alberta mortgage rates

Saskatchewan mortgage rates

Manitoba mortgage rates

Ontario mortgage rates

New Brunswick mortgage rates

Nova Scotia mortgage rates

PEI mortgage rates

Canada mortgage rates

Yukon mortgage rates

Northwest Territories mortgage rates

Nunavut mortgage rates

Working with a mortgage calculator can help you compare different mortgages in a single place.

Mortgage shopping is about more than just the interest rate

A low mortgage rate is usually a primary objective for buyers, but getting the lowest rate doesn’t necessarily mean you’re getting the best mortgage for your needs.

For example, you might opt for a fixed rate, which has a higher rate than a variable rate, if you’re uncomfortable with the risk of rates rising. Or, if you expect to come into a sizable sum of money soon (via an inheritance, for example), paying a higher rate for an open mortgage, which allows you to pay it off early without penalties, could be worth it.

As of December 2024, you can find fixed mortgage rates for as low as 4.14% in Newfoundland, but variable mortgage rates are 4.3% or more. The rate offers you receive depend on factors like your credit score, total debt level and income, and whether you apply for your mortgage at a Big Six bank or through a mortgage broker.

Mortgage rates are expected to decrease somewhat in the first half of 2025. The Bank of Canada might reduce its overnight rate another two times, which would lower variable mortgage rates by 0.5% versus today’s levels. Fixed mortgage rates will likely continue hovering between 4% and 4.5%. for much of next year.