Buying a home is one of the most important financial decisions you’ll make in your life. The amount of money you borrow for your home and the interest rate you get may determine your budget and will impact which home you purchase. For this reason, you must shop around to find the best mortgage rate possible by looking through the best mortgage lenders in Canada until you find the right loan for your situation.
The Best Mortgage Lenders in Canada
Numerous mortgage lenders exist in Canada, so you have plenty of options to review before taking out a home loan. While some homebuyers focus only on low rates, others consider the lender’s reputation, different loan offers, fees, and prepayment options. We’ve compiled our list of the best mortgage lenders in Canada, and some of their defining characteristics.
Best Mortgage Lenders for Low Rates
Even though interest rates are currently up due to the Bank of Canada’s rate hikes to cool off stubborn inflation figures, some mortgage lenders are traditionally known for offering lower rates than others. Lower mortgage rates usually means you’ll have a lower monthly mortgage payment or can afford a higher purchase price. These are the best mortgage lenders in Canada for those looking for the lowest rate possible.
Tangerine
- Mortgage refinancing: Yes
- Mortgage rates: Lower
- HELOC: Yes, available at 7.70%
- Why we like it: Your rate is guaranteed for up to 120 days. Your mortgage is portable, and you can take it with you. You also get a dedicated account manager as soon as you apply. You can make a lump sum prepayment of up to 25% of your original mortgage amount. Additionally, you can increase your regular mortgage payments by up to 25% on any given payment date.
- Not the best for: Those looking for in-person service since it’s an online bank.
It shouldn’t be surprising to see Tangerine listed as the best mortgage lender in Canada for low rates. Tangerine is one of the best banks for rates across its products, offering competitive savings account promotions, no-fee banking, and the best mortgage offers.
Another feature that helps Tangerine stand out is that Tangerine mortgages are portable. A portable mortgage means you can take your mortgage with you if you decide to move. You can keep your current rate, term, and loan amount. This unique Canadian mortgage feature also comes with no penalties.
You’re also assigned a dedicated account manager when you fill out your digital application. All these benefits make it clear that Tangerine is one of the best mortgage lenders in Canada if you want lower rates and better terms.
BMO
- Mortgage refinancing: Yes
- Mortgage rates: About the same as other big banks
- HELOC: Yes
- Why we like it: You can lock in your mortgage rate for 130 days. Accelerated payment options to pay off your mortgage faster. A mobile mortgage specialist will come to you.
- Not the best for: Not available through mortgage brokers. You must apply directly through BMO.
While the major banks in Canada don’t usually offer the same low rates that you could find with an online bank, they do have certain benefits that you won’t find anywhere else. Even though BMO doesn’t have the lowest rates, you can lock in your rate today for the next 130 days. Based on how interest rates have shifted throughout the last few years, this feature could saved you a significant amount of money based on the timing.
The Best Mortgage Lenders for First-Time Homebuyers
If you’re buying a home for the first time, you may be a bit nervous about the process, as extensive paperwork is involved. These are the best banks for mortgages if you’re a first-time homebuyer.
TD Bank
- Mortgage refinancing: Yes
- Mortgage rates: About the same as the major banks
- HELOC: Yes
- Why we like it: A reputable bank with locations nationwide. TD Bank has extensive resources for those new to homeownership to learn about the homebuying process.
- Not the best for: Those looking for a low rate or anyone who doesn’t have strong credit.
TD Bank is one of the best banks for mortgages for various types of clients since it’s well-established as one of Canada’s oldest banks. At the same time, you need strong credit to apply for a mortgage with any of the big lenders in Canada. The official TD website offers helpful tools to help you if you’re a first-time home buyer. You can learn about homeownership basics, get mortgage pre-approval, and look through mortgage rate offers.
Scotiabank
- Mortgage refinancing: Yes
- Mortgage rates: About the same as the big banks
- HELOC: Yes. The Scotia Total Equity Plan (STEP) lets you tap into your home equity
- Why we like it: Various mortgage product offers so that you can find something that matches your preferences. Many physical locations, so you can work with someone in person.
- Not the best for: Low rates since they can’t offer the competitive deals that can be found through online banks.
While the big banks can’t always compete with the lower interest rates online lenders offer, you have other benefits to consider. Scotiabank has various mortgage options, including mortgage products for first-time home buyers, second-home buyers, and mortgage renewals. They also offer a blended mortgage option, which allows you to combine your current mortgage rate with a new one to get a lower overall rate. Scotiabank is one of the most flexible mortgage providers in Canada. With so many brick-and-mortar locations, it’s easy to have face-to-face conversations, which many people still prefer.
CIBC
- Mortgage refinancing: Yes
- Mortgage rates: About the same as the big banks
- HELOC: Yes
- Why we like it: You can get up to $4,000 in cash back for switching to CIBC
- Not the best for: Rates are higher than what online banks can offer
CIBC is one of the big banks in Canada, and there’s likely a location near you. We chose this option for first-time home buyers because this lender provides guidance throughout the process. The mortgage affordability calculators and personalized assistance will help you out if you’re stuck at any point in the process.
RBC Royal Bank
- Mortgage refinancing: Yes
- Mortgage rates: About the same as the major banks.
- HELOC: Yes. Offered through RBC Homeline Plan®
- Why we like it: The largest bank in Canada with a trusted reputation if you want to buy your first homr.
- Not the best for: Finding the lowest rates as they can’t compare with online-only lenders.
Based on information from Canadian Mortgage Trends, RBC Royal Bank is the largest bank and top mortgage lender based on volume. RBC has helpful tools for first-time homebuyers who want to learn about the process. You can also find a mortgage specialist near you who you can meet with in person or have a video call with.
Best Mortgage Lenders for Bad Credit
The good news is that some lenders will still work with you if you don’t have the best credit score or haven’t built up enough credit. Previously, we looked at how you can obtain a mortgage with a “bad” credit score, which is anything below 660, according to Equifax. A credit score between 660 and 742 is considered good, while anything below 660 could qualify you as risky in the eyes of a lender.
Most Canadian lenders require a credit score of at least 600 to qualify for a mortgage, so for the sake of this article, we will assume that your score is between 600 and 660. It’s worth noting that even though there are alternative options for those with a poor credit score looking to get a mortgage (known as “B” lenders, we will only review the best mortgage lenders in Canada in this article.
Motusbank
- Mortgage refinancing: Yes
- Mortgage rates: Lower
- HELOC: Yes, starting at 7.70%
- Why we like it: Motusbank offers competitive interest rates like the other online banks. The key feature is that you can purchase a home with friends and family.
- Not the best for: No physical locations like the major banks.
While you may not have heard of Motusbank before, this lender is a subsidiary of Meridian Credit Union, one of Canada’s most popular credit unions. Motusbank is one of the best mortgage lenders in Canada for first-time home buyers and those who don’t have the best credit because you have the friends and family mortgage option. This kind of mortgage allows up to four people to purchase a home together by combining their funds. This unique approach to home buying lets everyone get a stake in the house to share the financial benefits and risks.
Since up to four unrelated people can pool their funds together to purchase a home, you can enter the real estate market if you don’t have the best credit or sufficient funds for a downpayment.
National Bank
- Mortgage refinancing: Yes
- Mortgage rates: Higher
- HELOC: Yes
- Why we like it: One of the few banks that works with self-employed people.
- Not the best for: Higher rates than online banks. Only specific properties are eligible.
National Bank is ideal for those who don’t have the best credit or are self-employed. When you work for yourself, obtaining a mortgage can sometimes be challenging. Since National Bank is the 6th largest bank in Canada, it offers numerous mortgage products. Even though the self-employment feature sticks out, we listed National Bank as one of the best mortgage lenders in Canada because of the quick approvals, flexible payment choices, and cash-back mortgages.
What to Look for with a Home Mortgage Lender
As exciting as it is to look for your dream home, you should take the search for your mortgage lender just as seriously since this will be a long-term commitment.
Here’s what you should look out for in a home mortgage lender:
- Monthly payments you can afford
- Options if you can’t make your mortgage payments
- Fair costs to get out of your mortgage
- The option to increase your mortgage payments or make a lump sum payment
You’ll also want to consider the lender’s reputation and the types of mortgage products they offer when searching for the best mortgage lenders in Canada. You can also use a mortgage broker to apply for several options without repeatedly going through the entire process.
When spotting red flags, you’ll want to avoid mortgage lenders in Canada who don’t explain terms to you, avoid answering your questions, or push you to sign off on a loan.
We also strongly recommend that you take some time to research mortgage terms so that you’re aware of what you’re getting into.
Where to Get Mortgage Pre-Approval
Many homebuyers will try to secure a mortgage pre-approval before they begin the house hunting process so that they don’t waste their time looking at properties they can’t afford. The good news is that most lenders will offer a preapproval process and guidance so that you’re not alone. While a mortgage pre-approval is non-binding, a hard inquiry on your credit report could reduce your credit score slightly. You may want to look for lenders that use a soft pull to check your credit.
Where can you get a mortgage pre-approval? You have numerous options since most lenders will offer a pre-approval, but you must gather the following information about the following before you start:
- Identification
- Proof of income like pay stubs or a letter of employment
- Proof of assets like bank statements
- An accounting of any debts you owe including loan balances, interest rates, and monthly payments
You’ll want to ensure that you prepare all the relevant documents before going through the mortgage pre-approval process. To save time, you can review our mortgage pre-approval document checklist. If you’re a first-time homebuyer, you’ll want to get pre-approved or at least speak with a specialist to understand what you’re getting into.
These are Canada’s best home mortgage lenders based on different financial situations, but you must shop around for mortgage rates and conduct your research. Also, not every lender will have mortgage products available in all Canadian provinces and territories.
