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Beth BuczynskiDisclaimer: 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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Nova Scotia mortgage rate update: December 2024
The Bank of Canada delivered an early Christmas present for Nova Scotia’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 Nova Scotia
The average mortgage rate in Nova Scotia
There’s not much value in calculating the average mortgage rate in Nova Scotia since it would include every mortgage type and term length from every lender, including the above-average rates associated with open mortgages and private mortgages.
The only rates that matter are the ones attached to the mortgage you hope to be approved for. If you’re interested in a variable-rate mortgage, for example, compare variable mortgage rates. If you’re looking for more stability, compare fixed rates according to term length. Specific comparisons like these will give you more relevant information to work with.
Your mortgage rate will ultimately be determined by your finances, so it doesn’t really matter what other people are paying.
2025 Nova Scotia 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.
Mortgage calculators to inform your home buying decisions
Nova Scotia housing market update: December 2024
After a furious October, Nova Scotia home sales moderated in November 2024. According to the Nova Scotia Association of Realtors, the 892 homes sold in November was a 7.3% increase compared to November 2023. The average sales price in October was $442,077, 8.4% higher than a year ago.
Most areas in the province saw year-over-year price gains. The average price in Halifax-Dartmouth, $576,484 rose by 9.3%, while the average price in Yarmouth rose 34.7% to hit $308,701.
Nova Scotia home sales and price forecast
According to the Canadian Real Estate Association (CREA), Nova Scotia can expect prices to rise 4.9% by the end of 2024.
Nova Scotia first-time home buyer programs
There are two provincial programs available to help buyers cope with the challenges of buying a first home in Nova Scotia, including:
- Down Payment Assistance Program. If you’re pre-qualified for an insured mortgage, you can apply for a loan worth up to $25,000 to put toward your down payment. The loan is interest free and must be repaid within 10 years.
- First-Time Home Buyers Rebate. If you are buying a newly constructed home or condo, you may be eligible for a rebate worth 18.75% of the provincial portion of the HST you’re charged. The maximum rebate amount is $3,000.
Federal assistance programs include the Home Buyers’ Plan and the First Home Savings Account. These tools can be combined, so it might be worth investigating both to see how they fit your goals and finances.
Land transfer taxes in Nova Scotia
If you’re a Nova Scotia resident buying a home in the province, you’ll be charged a municipal deed transfer tax. The tax rate depends on the municipality where the property is located. As of January 2024, the rate ranged from 0.5% to 1.5% of a home’s purchase price.
Non-residents who purchase residential properties containing three units or less are charged a non-resident deed transfer tax worth 5% of either the home’s purchase price or assessed value, whichever is greater.
Guide to Nova Scotia mortgage rates
Types of lenders in Nova Scotia
Mortgage lenders in Nova Scotia tend to fall into four categories, which include:
- Large chartered banks such as Scotiabank, RBC and TD.
- Credit unions such as East Coast Credit Union and Sydney 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 Nova Scotia
Fixed-rate mortgages
With a fixed-rate mortgage, the rate stays the same for the duration of the mortgage term, even if rates fluctuate.
Fixed rates provide certainty, which can make them easier to budget around than variable mortgage rates. That certainty comes at a price, though: Outside a few exceptions, fixed rates have historically been higher than variable rates.
Variable-rate mortgages
Variable mortgage rates rise or fall depending on which direction your lender’s prime rate moves. Depending on the state of the economy, a variable rate can increase or decrease multiple times during a mortgage term.
Variable rates are risky, which is why they’re typically lower than fixed rates. In a high-inflation environment, when lenders’ prime rates are driven upward by increases to the Bank of Canada’s overnight rate, variable mortgage rates can skyrocket.
» MORE: The difference between fixed- and variable-rate mortgages
Hybrid-rate mortgages
If you take out a hybrid-rate mortgage, a portion of your mortgage is subject to a variable rate and another portion is at a fixed rate of interest. Hybrid mortgages can dampen the impact of fluctuating interest rates in a particularly turbulent economy, but they 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 less than 20% of the purchase price, you must purchase mortgage default insurance, which adds to the cost of your loan. In these cases, you’ll be getting an insured mortgage.
If your down payment is greater than 20%, or you’re buying a home where a 20% down payment is required, like an investment property or a home worth $1 million or more, insurance is not required. In this scenario, you’re getting an uninsured mortgage.
Insured mortgage rates tend to be lower than uninsured mortgage rates.
Short-term and long-term mortgages
Short-term mortgages typically last five years or less. Long-term mortgages last over five years. With a shorter term, you’ll need to renew your mortgage sooner, which can provide flexibility, but it can also increase risk if rates are trending upward as your renewal date approaches.
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 that go beyond your pre-payment allowances, you’ll be penalized for breaking your mortgage.
Closed mortgages often offer better rates than open mortgages. But an open rate mortgage may be a good option if you think you may be able to pay off your mortgage early.
» MORE: Understanding open and closed mortgages
How Nova Scotia lenders determine mortgage rates
The mortgage rate you’re offered by a lender in Nova Scotia will be based on two primary factors; one based on the state of the economy and one based 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 Nova Scotia
Some of the mechanisms that shape rates are beyond your control, but there are steps you can take to convince lenders to offer you the best mortgage rates. For example, you can try:
- Improving your credit score. A higher credit score generally results in better loan offers. Get a better score by eliminating existing debt and paying future bills in full and on time.
- Increasing your income. It’s not always easy, but any additional income you can earn will improve your financial position. Lenders look at your income to assess your ability to afford a mortgage.
- Decreasing your total debts. Lenders consider your total debt load when determining your mortgage rate. Pay down personal loans, student loans or other types of debts if you can.
- Consider all your mortgage options. See if adjusting the loan type, the term length or the amortization period of your loan could result in you being offered a better rate.
Factors that affect mortgage affordability in Nova Scotia
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 Nova Scotia 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 Nova Scotia, 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 Nova Scotia stacks up:
Frequently asked questions about Nova Scotia mortgage rates
As of December 2024, some lenders in Nova Scotia were offering five-year fixed mortgage rates for 4.14%. Three-year fixed mortgage rates were around 4.2%, while five-year variable mortgage rates were down to 4.3%.
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.
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