Mortgage rates in Manitoba
The mortgage market in Manitoba is primarily served by the big five Canadian banks of BMO, CIBC, RBC, Scotiabank, and TD Canada Trust. Smaller regional credit unions and monoline lenders also serve the home financing market in the province.
What's the difference between fixed-rate and variable-rate mortgages in Manitoba?
A fixed-rate mortgage will allow you to lock in your interest rate for the duration of your mortgage term. Most mortgages in Manitoba are fixed-rate loans. In Manitoba's largest city, Winnipeg, 77.7% of mortgages are fixed rate. Outside of Winnipeg but still within Manitoba, only 73% of mortgages are fixed rate.
Counter to fixed rates, variable rate mortgages allow the interest rate to be more dynamic, rising, and falling as Canadian banks change their prime lending rates. Currently, on a variable rate mortgage, you can receive a lower interest rate than on a fixed-rate mortgage. The risk with variable rates is you may end up paying more in interest costs if prime lending rates, in Canada, increase.
What's the difference between open and closed term mortgages?
Another consideration to make when getting a mortgage is the type of mortgage term you want. There are two main types of mortgage terms. You can get either an open term or closed term mortgage.
An open term allows you to pay back your mortgage in full whenever you want. You can also make extra payments towards your mortgage principal without limit. Open term mortgages usually come in 6 month or 1-year terms and have higher interest rates.
A closed term mortgage limits how much extra you can pay towards your mortgage every year. In what's known as a prepayment limit, your lender will cap your ability to pay off your mortgage or make extra payments on your mortgage balance.
Term lengths for closed term mortgages usually range between 6 months and 10 years, and different lenders have different prepayment limits on closed terms.
Manitoba land transfer tax
Every time a house, condo, or townhouse is purchased in Manitoba, the buyer must pay a land transfer tax. The Manitoba land transfer tax is also sometimes called the Land Title Transfer Tax.
The tax is paid to the Manitoba land titles office every time ownership of real estate changes hands. The land transfer tax is calculated on a sliding scale as follows:
- 0% on the first $30,000 of the purchase price
- 5% on the purchase price above $30,000 and less than or equal to $90,000
- 1% on the purchase price above $90,000 and less than or equal to $150,000
- 5% on the purchase price above $150,000 and less than or equal to $200,000
- 2% on the purchase price above $200,000
- $70 standard registration fee
The tax is applied to all purchases of residential real estate in Manitoba. The province does not provide any first-time home buyers rebate on the land transfer tax.
To show how the land transfer tax would look in practice, let's assume you purchased a home in Manitoba for $250,000. The land transfer tax you would have to pay would be as follows:
- $0 on the first $30,000 of the purchase price
- $300 on the purchase price from $30,000 to $90,000 ($60,000)
- $600 on the purchase price from $90,000 to $150,000 ($60,000)
- $750 on the purchase price from $150,000 to $200,000 ($50,000)
- $1,000 on the remaining purchase price from $200,00 to $250,000 ($50,000)
- $70 registration fee
In total, you would have to pay a land transfer tax of $2,720 ($300 + $600 + 750 + $1,000 + $70).
Manitoba housing market
Manitoba has the highest homeownership rate out of all Canadian provinces. 77.8% of families live in a home that they own. The national average is 62.8%.
Unlike other regions in Canada, Manitoba has not seen overheating of its housing market, which has allowed many Manitobans to own their own homes.
Winnipeg housing market
Winnipeg's real estate market is considered healthy, compared to other cities in Canada. Prices for real estate in Winnipeg have grown at a sustainable pace.
Winnipeg has a diversified economy with industries such as manufacturing, health care, government, and construction comprising most of its economic activity. The city's low cost of living, along with being Manitoba's capital, has made Winnipeg an attractive city for people to live, work, and do business.
Manitoba mortgage brokers
Working with a mortgage broker has many benefits over trying to search and apply for a mortgage on your own. Mortgage brokers in Manitoba have access to national mortgage lenders as well as credit unions and mortgage finance companies that operate in the province.
Mortgage brokers can make the mortgage application process much more efficient. If you apply for mortgage pre-approval with different lenders, they'll each pull a credit check on you. When you work with a broker, your credit history will only be examined once.
Brokers will also have access to much better mortgage rates though volume discounts they receive from mortgage lenders.
When you're looking for a mortgage broker in Manitoba, ensure that they have the proper licensing and expertise to help you. The Manitoba Mortgage Brokers Act is the governing legislation that sets and enforces the rules and regulations that all mortgage professionals in Manitoba must follow.
The Manitoba Securities Commission oversees the administration of the Mortgage Brokers Act. Anyone who wants to become a mortgage broker or mortgage salesperson in Manitoba must meet specific educational requirements before they can be licensed in the province.
With 1.3 million residents, Manitoba is Canada's 5th largest province by population. Manitoba also has the 7th largest economy amongst Canadian provinces. Primarily driven by its natural resources, the province's economy is propelled by the forestry, farming, agriculture, and mining industries.
Outside of the natural resource industries, the government sector is also a significant employer in the province. The Royal Canadian Mint has substantial operations in Manitoba's capital, Winnipeg. The Royal Canadian Mint in Winnipeg is responsible for producing all coinage in Canada, as well as other foreign currency coins.