Mortgage Rates in Newfoundland and Labrador

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Mortgage rates in Newfoundland and Labrador

Newfoundland and labrador's mortgage lending market is served by all the major Canadian banks as well as smaller region mortgage lenders and a network of mortgage brokers.

The majority of mortgages in Newfoundland are fixed rate mortgages. Accounting for 85% of all mortgages, Newfoundland and Labrador has one of the highest rates of fixed rate mortgages amongst Canadian homeowners.

Newfoundland and Labrador land transfer tax

Newfoundland charges a land transfer tax on all property purchases. The tax has two components. A tax on the property's value and a tax on the mortgage amount. Newfoundland's land transfer tax is calculated as follows:

On the property value:

  • $100 for the portion of the property's value that is $500 or less
  • $100 plus 0.4% of the property's value over $500

On the mortgage amount:

  • $100 for the portion of the mortgage amount that is $500 or less
  • $100 plus 0.4% of the mortgage amount over $500

As an example, suppose you buy a house in Newfoundland for $200,000, and you take out a mortgage of $150,000 to finance your purchase. The land transfer tax you owe would be calculated as:

  • $898 on the property's value. Calculated as ([$200,000 - $500] x 0.4%) + $100
  • $698 on the mortgage amount. Calculated as ([$150,000 - $500] x 0.4%) + $100

For a total land transfer tax of $1,596 ($898 + $698)

Newfoundland and Labrador housing market

Over the last few years, house prices in Newfoundland have been trending down slightly. The average home sold for $240,000 in 2020, down from $249,000 in 2018.

St John's, the capital and largest city in the province, has seen house prices decline by as much as 11% since 2015. The average house sold for $340,000 in 2015; by 2020, the average home sold for $300,000 in St John's.

Despite the housing downtrend in the province, low unemployment rates, coupled with continued GDP growth, is expected to help bolster the real estate market in the coming years.

Homeownership rates in Newfoundland and Labrador are amongst the highest in Canada, with 74.4% of households owning their primary place of residence. The province's homeownership rate is the 2nd highest in Canada, only behind Manitoba.

About Newfoundland and Labrador

Newfoundland and Labrador is the easternmost province in Canada. It is comprised of the island of Newfoundland and the continental portion known as Labrador. With 520,000 residents, Newfoundland and Labrador is the 9th largest province by population in Canada.

Despite Labrador accounting for the majority of the province's landmass, only 6% of residents live in Labrador, with the remaining 94% living on the island of Newfoundland.

Newfoundland and Labrador has a per capita GDP of $63,000, giving it the 3rd highest GDP per capita and the 8th largest total GDP out of all Canadian provinces.

The economy, of Newfoundland and Labrador, is primarily service-based with financial services, health care, and government services, accounting for the majority of the province's economic output. Mining and oil production also make up a significant portion of the province's GDP, as does the fishing industry.

Ⓒ MapleMortgage.ca 2020

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