Buying a home is usually the most important purchase of a lifetime. However, mortgage payments account for a considerable proportion of the budget, not to mention other housing-related expenses. In 2023, high inflation had a number of effects, including a meteoric rise in the key interest rate, and thus in mortgage rates. Finding the lowest possible mortgage rate, whether for a new purchase or a renewal, is critical to maintaining sound financial management.
To this end, nesto, a mortgage brokerage firm founded in 2018, helps you find the best mortgage rates on the market. The latter has revolutionized the mortgage industry in Canada with a fully digital mortgage application process and commission-free brokers. In this article, find out how nesto can help you find the best mortgage rate.
nesto is Canada’s first digital mortgage platform. It was founded in 2018 in Montreal, Quebec.
Their cutting-edge technology enables us to analyze the entire market in just a few moments and find the lowest mortgage rates for your situation. Despite a 100% digital process, nesto’s commission-free mortgage experts offer support and advice.
nesto mortgage professionals are licensed in all Canadian provinces.
The nesto mortgage platform helps you find the best mortgage rates, whether for a new mortgage, renewal or refinancing.
nesto has been doing business with several mortgage lenders, including banks and credit unions, in addition to offering their own mortgage products since 2022.
Depending on your situation, you can obtain and compare the best fixed and variable rates on the market, for several amortization periods.
What’s more, you can secure your rate for up to 150 days, protecting yourself against interest rate hikes. In fact, it’s the longest rate-lock period offered in Canada. Other lenders offer a rate guarantee generally ranging from 90 to 120 days.
However, there are requirements for obtaining a nesto mortgage with the lowest interest rates. For example, you need a credit score above 680 to have access to the best offers.
The nesto mortgage brokerage differs from other brokers on several levels.
First of all, nesto has partnerships with several mortgage lenders in addition to offering their own products. This is one of the reasons why nesto offers the lowest mortgage rate on the market right from the start.
Secondly, nesto mortgage professionals are salaried, unlike mortgage brokers who are traditionally paid on a commission basis. A portion of the commissions paid by the lender is returned to customers in the form of an additional rebate on rates.
You don’t need to take out additional products like mortgage insurance to get the best rate. In fact, nesto guarantees that its customers get the lowest rate for their situation, without negotiation (otherwise they get $500 with the low-rate guarantee).
Another advantage of nesto is that the mortgage application process is entirely digital. You speak with a mortgage broker at the very end, which saves a lot of time. Note that, if needed, you can get support and advice from mortgage experts throughout the process.
Finally, as mentioned above, nesto offers the longest rate lock period in Canada, at 150 days.
Whether you’re looking for pre-qualification or mortgage approval, nesto lets you complete your application online using their fully digital platform. Right from the start, you’ll get the lowest mortgage rates for your situation.
To begin your application, you must choose between a new mortgage, a mortgage renewal or a mortgage refinancing.
At the end of the process, you can speak with one of their commission-free brokers.
First, select the “New mortgage” option:
Then answer the seven questions on the form in less than a minute:
These questions include the type of property (house, condo, plex), the proposed purchase price and the amount of the downpayment.
Finally, you get the lowest rate on the market for a new mortgage based on your situation:
You can quickly modify information such as purchase price and down payment. What’s more, you can switch between fixed and variable rates.
If you have any questions about the products on offer or would like to discuss the options available, you can make an appointment with a nesto mortgage advisor.
Finally, if you want to go ahead with the offer, you can click on the “Continue” button and fill in the application form. You don’t need to talk to an advisor.
First, select the “Mortgage renewal” option:
These questions include the current value of the property, the mortgage balance, whether the mortgage is insured (CMHC, Genworth Canada …), etc.
Finally, you get the lowest rate on the market for a mortgage renewal based on your situation:
You can quickly modify information such as property value and mortgage balance.
What’s more, you can switch between fixed and variable rates.
If you would like to go ahead with this mortgage renewal offer, you can click on the “Continue” button and complete the application form.
First, select the “Mortgage refinancing” option:
Then answer the six questions on the form in less than a minute:
Finally, you get the lowest rate on the market for a refinancing based on your situation:
You can quickly modify information such as property value, mortgage balance and additional funds required.
If you would like to proceed with this mortgage refinancing offer, please click on the “Continue” button and complete the application form.
With nesto, you get the lowest rate on the market for your situation right from the start. You don’t need to negotiate or take out additional products like mortgage insurance to get the best rate.
If you wish, you can compare the rate you get at nesto with other banks or brokers.
If you find a better rate elsewhere for an equivalent mortgage product, nesto will match or beat that offer. However, if we can’t match or beat this offer, nesto will donate $500. It’s the nesto low rates guarantee.
In short, nesto helps you find the best mortgage rates on the market. To achieve this, nesto offers a fully digital mortgage application process and commission-free brokers. Their cutting-edge technology enables us to analyze the entire market in just a few moments and find the lowest mortgage rates for your situation. Whether for a new mortgage, renewal or refinancing.
Note that you don’t need to take out additional products like mortgage insurance to get the best rate. What’s more, nesto guarantees that its customers get the lowest rate for their situation, without negotiation.
Finally, you can secure your rate for up to 150 days (the longest rate lock period available in Canada).
Here are the answers to the most frequently asked questions about nesto.
nesto is a mortgage brokerage firm founded in 2018 that offers a fully digital mortgage application process and commission-free brokers. The technology it uses enables it to analyze the entire market in a matter of moments and find the lowest mortgage rates for your situation. nesto mortgage professionals, who are licensed in all Canadian provinces, can offer support and advice throughout the process.
Of course. nesto Mortgage Brokerage is accredited by the regulatory body in each province in which it operates. What’s more, nesto mortgage consultants are licensed professionals. For example, in Quebec, Nesto Inc. is accredited by the Autorité des marchés financiers (AMF). What’s more, nesto mortgage brokers are accredited by the Organisme d’Autoréglementation du Courtage Immobilier du Québec (OACIQ).
A mortgage broker is a professional who negotiates the best mortgage for a customer by comparing offers from several lenders. These lenders include banks and credit unions. In other words, the mortgage broker is an intermediary between the borrower and the lender. A mortgage lender, on the other hand, is a financial institution that offers mortgage products directly to borrowers. Offers are therefore limited to the financial institution’s mortgage products.
A mortgage rate is the interest rate (e.g. 5.95%) you pay on your mortgage balance for the term of your loan (e.g. 5 years). The mortgage interest rate is determined by several factors. These include credit score, income and loan characteristics (type of loan, loan term, ability to prepay without penalty, etc.).
To compare mortgage rates in Canada, you need to compare similar offers. In fact, the characteristics of mortgage loans vary from one lender to another. For example, loan types (fixed or variable rates), terms (1, 3 or 5 years), penalties for cancelling your mortgage, prepayments without penalty, etc. So when comparing mortgage rates, be sure to compare similar products.
With a fixed-rate mortgage, the interest rate remains the same for the duration of the mortgage. In this way, it provides predictability and stability in borrowers’ budgets. Conversely, the interest rate on a variable-rate mortgage varies according to the key interest rate. In the long term, a variable-rate mortgage is more advantageous than a fixed-rate mortgage. On the other hand, borrowers must have the capacity to meet mortgage payments that may increase.
The term of a mortgage is the length of time you have committed to a mortgage product with a lender. It is not the length of time required to repay the entire mortgage. Mortgage terms in Canada are generally one to 10 years, but shorter terms are also available. The most common mortgage term is five years (more precisely, a 5-year fixed-rate mortgage). When comparing mortgage offers, be sure to compare mortgages with the same term.
The amortization period is the time required to repay the entire mortgage. The amortization period for a mortgage in Canada is generally 25 years, but you can opt for a shorter or longer period.
A mortgage downpayment is the amount of money you pay towards the purchase price of the property. The minimum downpayment for the purchase of a property in Canada is 5% of the purchase price. However, you can make a larger downpayment to reduce the mortgage amount. In fact, a larger downpayment will reduce your mortgage payments. Note that mortgage loan insurance is required if the mortgage downpayment is less than 20% of the purchase price of the property.
The best mortgage rates vary according to several factors, such as loan type and term. Currently, nesto’s lowest insured 5-year fixed rate is 5.54% (rate effective September 29, 2023). At the six largest Canadian banks, this rate averages 6.20%. Next, nesto’s lowest insured 5-year variable rate is 5.95%. For the six largest Canadian banks, the average rate is 7.06%. For 3-year mortgages, interest rates have been higher than for 5-year mortgages since the end of 2022.
The ideal credit score to obtain the lowest mortgage rate is 680 or more. Ideally, the credit score should be as high as possible (out of 900) to obtain the best interest rate. In other words, the riskier the borrower, the higher the interest rate. Like many lenders, nesto has strict requirements for its mortgages, reserving its best rates for borrowers with a good credit score. Unfortunately, nesto cannot help people with a history of bankruptcy or consumer proposals.
Fixed rates are based on the bond market. Even though fixed rates fluctuate regularly, the interest rate on your fixed-rate mortgage will remain the same for the duration of your loan. Variable rates, on the other hand, vary according to prime rates. The latter is determined according to the Bank of Canada (BoC) reference rate. The BoC meets eight times a year and can change the reference rate at any time.
The prime rate (PR), also known as the prime rate, is the rate used by financial institutions and mortgage lenders to determine the interest rate on their loans. Financial institutions determine their prime rate on the basis of their cost of financing, which varies according to the key interest rate set by the Bank of Canada (BoC). Lenders may grant a discount on the prime rate depending on the borrower’s situation (e.g.: TP – 1%).
The policy rate, also known as the target overnight rate, is the interest rate at which banks and other financial institutions lend each other funds on the financial markets for a period of one day. The key rate, set by the Bank of Canada, is used as a reference rate by financial institutions to determine the interest rate on their loans (lines of credit, mortgages, personal loans, etc.).
To qualify for a mortgage amount, you must pass a mortgage stress test. The stress test confirms that you can continue to make your mortgage payments if interest rates rise. The borrower must qualify for a mortgage using a qualifying rate. This corresponds to the higher of the Bank of Canada’s five-year reference rate or the interest rate obtained with your lender, plus 2%.
A mortgage rate lock locks in an interest rate for a predetermined period. This period is generally 90 to 120 days for lenders in Canada. However, at nesto, the blocking period for a new purchase or renewal is 150 days. This is the longest rate-lock period offered in Canada. Locking in allows you to get the best mortgage rate available if interest rates rise.
The interest rate is not the only factor to consider when choosing a mortgage. Of course, the lowest interest rate means lower mortgage payments. However, some low-rate mortgage products have less flexibility, often linked to penalties for early repayment and mortgage termination. It is therefore advisable to select the lowest mortgage rate according to your situation and needs.
Several factors are used to determine the interest rate on a mortgage in Canada. The most important factors in obtaining the best rates are credit score and income. In other words, the riskier the borrower, the higher the interest rate. Depending on these factors, a borrower may not qualify for the lowest interest rate. However, the interest rate is not necessarily the most important thing to look at. Indeed, some of the lowest-rate mortgages exclude features such as prepayment without penalty.
Right now, the best mortgage rate is available with a 5-year fixed-rate insured mortgage. This insured 5-year fixed rate is 5.95% at nesto, compared with an average of 6.20% at the major Canadian banks (rate in effect on September 29, 2023). You can compare the best mortgage rates in Canada here.
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