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Saskatchewan mortgage rate update: November 2024
For the first time in a while, fixed mortgage rates are in the news. Unfortunately for mortgage shoppers in Saskatchewan, most of the talk has been around fixed rates rising in response to the recent U.S. election.
U.S. government bond yields rose following Trump’s win on November 5, 2024, the result of investors selling their bonds and moving into more growth-oriented assets. When bond yields in the U.S. fall, the yields on three- and five-year government bonds in Canada tend to follow suit.
This is significant because it’s those bond yields that determine Canada’s three- and five-year fixed mortgage rates. When yields increase over an extended period, fixed rates do too.
There was a notable spike in yields on November 6, but they quickly returned to their pre-election levels. Fixed mortgage rates haven’t moved, but with yields being significantly higher than they were in October, there’s no reason to believe that fixed rates will move anywhere but up.
For now, the lowest fixed mortgage rates in Canada are hovering around 4%.
Variable mortgage rates remain stable, and won’t change until the Bank of Canada delivers its next overnight rate decision on December 11. Another cut is likely, but it’s difficult to say whether the Bank will announce another jumbo 50-basis point reduction. If it does, variable mortgage rates will once again be Canadians’ most affordable option.
Historical Trend: New mortgage loans in Saskatchewan
The average mortgage rate in Saskatchewan
There’s not much value in calculating the average mortgage rate in Saskatchewan 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.
2024 Saskatchewan mortgage rate forecast
Variable mortgage rates
After the Bank of Canada’s decision to lower its overnight rate on July 24, variable mortgage rates continue shrinking. A reduction in the overnight rate typically leads to an identical decline in lenders’ variable rates.
How many times variables dip in the last half of 2024 remains to be seen. The Bank of Canada will be cautious about cutting the overnight rate too quickly, which could trigger another rise in inflation. Another two modest cuts by year end is a reasonable expectation.
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.
Prior to August 2024’s stock market turbulence, analysts weren’t expecting fixed mortgage rates to fall drastically before the end of 2024. But three-year bond yields quickly sank to their lowest point since April 2022, five-year yields dipped lower than they’ve been in over a year, and fixed mortgage rates edged below 4.3% in some cases. None of this was predicted.
Barring any more investor panic attacks, fixed rates should stay comfortably above 4% for the rest of the year.
Mortgage calculators to inform your home buying decision
Saskatchewan housing market update — October 2024
The benchmark price in Saskatchewan was $343,400 in October, down about $400 since September, and about 6% higher than a year ago.
Saskatchewan home sales and price forecast
Expect prices and sales in Saskatchewan to continue rising at a steady pace in 2024.
As one of Canada’s most affordable places to live and own property, Saskatchewan should continue attracting new residents, both from other provinces and other countries, which will keep pressure on provincial housing stock.
Low prices and high rents are also attractive to real estate investors, who may covet properties in Regina and Saskatoon for their profitability. The more properties that get snapped up by investors, the tighter the market will become.
Saskatchewan first-time home buyer programs
There aren’t many provincial programs available to eligible first-time home buyers in Saskatchewan. Two of the only ones still available are:
- The Mortgage Flexibilities Support Program, which allows homeowners earning income below certain thresholds to access new unis in designated housing projects in Saskatoon.
- The First-Time Home Buyers’ Tax Credit, which provides a tax credit worth up to $1.050 to eligible taxpayers.
First-timers in Saskatchewan can also make use of federal programs like the Home Buyers’ Plan and the First Home Savings Account.
Land transfer taxes in Saskatchewan
Saskatchewan doesn’t charge home buyers a land transfer tax. Instead, home buyers must pay two registration fees as part of their closing costs:
- The cost to register a transfer of title is 0.4% of the purchase price. A home worth $300,000 would cost $1,200.
- The cost to register a mortgage depends on the mortgage amount. The cost to register a mortgage worth between $250,000 and $500,000 is $250 per title for the first four titles. For a mortgage worth $500,000.01 and $750,000, the cost is $500 per title. For a fifth title, the registration fee drops to $55 regardless of the mortgage amount.
Guide to Saskatchewan mortgage rates
Types of lenders in Saskatchewan
Mortgage lenders in Saskatchewan tend to fall into four categories, which include:
- Large chartered banks such as Scotiabank, RBC and TD.
- Credit unions such as Affinity Credit Union and Conexus Credit Union.
- B lenders that work with borrowers with lower credit scores, such as True North Mortgage and Neo Financial.
- Private lenders, who typically deal with borrowers in need of short-term funding.
Types of mortgages in Saskatchewan
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 Saskatchewan lenders determine mortgage rates
The mortgage rate you’re offered by a lender in Saskatchewan 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 Saskatchewan
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 Saskatchewan
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 Saskatchewan 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 Saskatchewan stacks up:
Working with a mortgage calculator can help you compare different mortgages in a single place.
Frequently asked questions about Saskatchewan mortgage rates
As of November 2024, lenders in Saskatchewan are offering both three- and five-year fixed rates for below 4.4%. Shorter fixed terms will cost you more. Variable mortgage rates are generally available for 5.4% or lower, depending on where you apply.
Mortgage rates have come down considerably in 2024. Three- and five-year fixed rates are nearing 4%, but may have reached their bottom for this year. Variable mortgage rates have already dropped by 100 basis points and will keep declining with every Bank of Canada rate cut.
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