Kurt Woock
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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Yukon mortgage rate update: December 2024
The Bank of Canada delivered an early Christmas present for the Yukon’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%.
The average mortgage rate in the Yukon
There’s no single average for mortgage rates in the Yukon. Even if you had access to all the current mortgage rates being offered by lenders in the Yukon, it wouldn’t be much help when you’re mortgage shopping. That’s because the mortgage offer you receive is always specific to you and takes into account multiple factors like your credit score, the type of mortgage you want and the amount you need to borrow.
Think about the “average mortgage rate” the way you would average home prices in the Yukon. It’s interesting data to have, but it’s not necessarily relevant to your own home buying journey.
2025 Yukon 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.
Yukon housing market update
The Yukon Bureau of Statistics releases quarterly reports on real estate trends. The most recent report covered July through September 2024. During those months, the average sale price of a single-detached house in Whitehorse was $684,500. The average condo sold for $457,400.
Yukon first-time home buyer programs
Yukon residents who are unable to get traditional financing can apply for the Yukon Home Ownership Loan Program when buying or building a primary home. You must have a down payment of at least 2.5%. If approved, the program finances the loan, which you’ll repay at an interest rate equal to one percentage point below the prevailing average 5-year mortgage rate. Anyone — not just first-time buyers — may apply.
Yukon land transfer taxes
The land transfer fee in the Yukon has two parts:
A flat fee. This fee is based on your home’s current value:
- $50 for a home value of less than $100,000.
- $150 for home values between $100,000 and $500,000.
- $350 for home values between $500,000 and $3 million.
- $550 for home values between $3 million and $10 million.
- $750 for home values above $10 million.
A variable fee. The variable fee, called the assurance fund fee, is based on any increase in the home’s value since it was last sold. You’ll pay $20 for the first $10,000 your home’s value has risen since it was last sold plus $10 for every additional $10,000 of increased value.
Calculators to inform your home buying decisions
Guide to Yukon mortgage rates
Types of lenders in the Yukon
Mortgage lenders in the Yukon tend to fall into three categories, which include:
- Large chartered banks such as Scotiabank, RBC and TD.
- B lenders that work with borrowers with lower credit scores..
- Private lenders, who typically deal with borrowers in need of short-term funding.
Types of mortgages in the Yukon
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: Fixed-rate vs. variable-rate mortgages
Hybrid-rate mortgage
One portion of your mortgage is subject to a variable rate and the other 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 make a down payment of less than 20% on a home costing under $1 million, you must insure your mortgage. Mortgage insurance adds to the cost of your loan. You pay a percentage of your mortgage amount, 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 term, you’ll need to renew your Yukon mortgage sooner, which can provide flexibility. Short-term mortgages often have lower interest rates than long-term mortgage rates.
Closed and open mortgages
The main 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 make additional payments on a closed mortgage, 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 lenders in the Yukon determine mortgage rates
The mortgage rate you’re offered by a lender in the Yukon 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 the Yukon
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 the Yukon
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 Yukon 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 the Yukon stacks up:
There’s more to mortgage shopping than 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.
Frequently asked questions for Yukon mortgage rates
As of December 2024, some lenders in the Yukon were offering fixed mortgage rates below 4.5% and variable mortgage rates for around 5% for certain home purchases.
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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