Mortgage Refinancing is a smart move opted for by many in Calgary. This is a go-to financial move if you want to lower your interest rate, shorten your loan term or access home equity.

However, mortgage refinancing rates in Calgary vary for each individual. They fluctuate based on many key factors that lenders consider before approving your application.

Knowing these factors will help you secure the best rate possible, saving a huge amount over your loan tenure.

Factors Affecting Mortgage Rates in Calgary

  • Credit Score and History: One of the significant factors that affect the Calgary mortgage rates is the credit score and the credit history. Lenders view the credit score as a measure of your financial reliability. A higher score can help one qualify for lower interest rates. Additionally, if the credit score is lower, lenders may charge a higher rate to mitigate the probable risk. It is a good idea to review your credit before, pay off outstanding debts and avoid new credit inquiries before applying for a loan. Work with a professional mortgage expert to understand ways to improve your credit score, for even slight improvement in the score will make a huge difference in the mortgage rate you receive.
  • Current Market Interest Rates: Mortgage Refinancing rates in Calgary are heavily influenced by overall market conditions and the Bank of Canada’s benchmark interest rate. When the central bank raises or lowers its key rate, lenders adjust their mortgage rates accordingly. If the interest rates are downward, it is a good time to refinance. It is advisable to work with an experienced mortgage broker in Calgary who will help you lock in a favorable rate when the conditions are right.
  • Home Equity to LTV Ratio: Your home equity is the difference between your home’s market value and the remaining mortgage balance. This affects the amount of risk a lender perceives. The lenders use the LTV, or the loan-to-value ratio, to assess this. A lower LTC signifies less risk and qualifies you for more competitive refinancing rates.
  • Term of Loan and Mortgage Type: The type of mortgage you choose – fixed or variable rate also influences your refinance mortgage rate in Calgary. The fixed-rate mortgages have slightly higher rates but offer long-term stability, while variable rate options may start lower and fluctuate with market conditions. Also, the term of the loan matters. Shorter terms come with lower interest rates compared to longer ones.
  • Employment Stability and Income Level: Lenders want assurance that you are capable of repaying your refinanced mortgage. Your employment status, income level and job stability are important factors. Consistent income and a strong employment record signal financial stability, making you a lower-risk borrower. If you are self-employed, you will need to provide extra documentation, such as tax returns and bank statements, for income verification.

Mortgage Refinance Tips in Calgary

  • Check your credit score before applying
  • Compare rates from multiple Calgary Lenders
  • Refinance when the interest rate drops
  • Build at least 20% home equity
  • Choose between fixed and variable rates wisely
  • Work with an experienced mortgage broker

Personal and Market-Driven factors affect the mortgage rate in Calgary. By working with a licensed and professional mortgage specialist, you can position yourself for the best possible refinancing deal. The broker will help you navigate the best mortgage refinancing deals in Calgary at the competitive rates available.