Best Mortgage Rates in Newfoundland
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Newfoundland mortgage rate update: April 2025
Newfoundland’s mortgage shoppers may have been disappointed on April 16, 2025, when the Bank of Canada decided to hold its overnight rate at 2.75%. The rate hold means variable mortgage rates will stay at their current levels — around 4% at some brokerages, though higher at Canada’s biggest banks — until at least June 4, when the Bank is scheduled to make its next rate decision.
Fortunately, fixed mortgage rates in Newfoundland remain fairly approachable.
As of April 16, some brokerages were offering three-year fixed rates for around 4% and five-year fixed rates for about 3.75%. Those aren’t mind-blowingly low rates, but they might be as good as they’re going to get for the time being.
Government bond yields, which help determine lenders’ fixed mortgage rates, have been in the same general range since February. Without a significant, sustained dip in yields, lenders won’t have much reason to lower their fixed rates.
While rates may not improve in the coming weeks, home buyers have a few things working in their favour. Housing stock is piling up, which should take some pressure off of home prices, and Donald Trump’s tariff war may not be the extinction-level event many had feared.
If you have job security, it’s actually not a bad time to be looking for a home.
- Newfoundland Housing Market Update - April 2025
While housing demand tapered off in much of the country in March, the Newfoundland market’s strong start to 2025 continued. Home sales in March 2025 were up 9.7% year-over-year and 6.9% above the ten-year average for the month. Sales across the first three months of the year increased 19.3% compared to the same period in 2024.
Strong demand and declining inventory translated to significantly higher prices. The average sale price in the province, $352,370, was 18.2% higher than a year ago, and set a new record for March. The benchmark price for single-family homes in St. John’s, $385,500, rose 11% year-over-year.
Newfoundland home sales and price forecast
Due to the ongoing tariff standoff with the U.S., the Canadian Real Estate Association’s April 2025 housing market forecast featured a slew of deteriorating expectations. CREA’s projections for Newfoundland, however, didn’t see the same slippage as those for other provinces.
In January, CREA expected sales in the province to to increase by 8.2% this year. They now project sales to rise by 7.6%.
Expectations around price growth have fallen a little further. CREA previously estimated that the average sale price in Newfoundland would rise by 6.7% in 2025, but the anticipated increase was downgraded to 4.4% in April.
Read more about the Bank of Canada's latest rate announcement.
The BoC makes policy interest rate announcements eight times a year. Here's what you need to know.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 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.
Crunch the numbers with our mortgage calculators
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.
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:
Ease of application.
Customer service.
Any other fees not included in the APR.
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.
Frequently asked questions
What’s a good mortgage rate in Newfoundland and Labrador right now?
What’s a good mortgage rate in Newfoundland and Labrador right now?
As of April 2025, you can find fixed mortgage rates for around 3.75% at some mortgage brokerages in Newfoundland, while variable rates are closer to 4%. 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 broker.
Will mortgage rates come down in 2025?
Will mortgage rates come down in 2025?
Mortgage rates may decrease further in the first half of 2025. The Bank of Canada might reduce its overnight rate again in June, which would lower variable mortgage rates by 0.25% versus today’s levels. Fixed mortgage rates will likely continue hovering between 3.75% and 4.25% for much of the year.
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Clay Jarvis