Mortgage rates in PEI
In Prince Edward Island (PEI), residential mortgages are offered by all the major Canadian banks as well as smaller national banks that operate in the province.
85% of all mortgages in the province have a fixed interest rate, making fixed-rate mortgages the most popular choice amongst residents of Prince Edward Island.
PEI land transfer tax
If you purchase property in PEI, you're obligated to pay a land transfer tax upon the closing of the transaction. In PEI, the land transfer tax is also referred to as the Real Property Transfer Tax.
The real property transfer tax you pay is based on the purchase price of the property or the assessed value of the property, whichever is greater. The tax is calculated as follows:
- $0 tax if the purchase price and the assessed value of the property are less than $30,000.
- 1% tax on the greater of the purchase price or assessed value of the property.
As an example of how the land transfer tax works, let's assume you purchased a home in PEI for $260,000. Your land transfer tax would be $2,600 ($260,000 x 1%).
If you qualify as a first-time homebuyer in Prince Edward Island, you could be eligible for the Real Property Transfer Tax first-time homebuyers exemption. This exemption would allow you not to pay the land transfer tax on your property purchase.
PEI also has an inter-family transfer exemption on real property transfer tax. This exemption allows a property to be transferred to another family member without having to pay any tax on it. The transfer must be made at no cost, meaning it shouldn't have been sold for anything worth more than $1.
PEI housing market
Prince Edward Island's housing market has seen considerable price appreciation over the last few years, particularly in the province's capital, Charlottetown.
House prices in Charlottetown have appreciated 37% since 2017, when the average home sold for $200,000. In 2020, the average home sold for $275,000. A large part of that price increase is due to the perceived housing affordability and people wanting to move to the province for work or retirement.
PEI mortgage brokers
If you're looking for a mortgage, a licensed mortgage broker can help you make sense of the many mortgage options on the market as well as save you money by finding you a great interest rate.
A local mortgage broker could also help you find a more tailored solution to your property financing needs, especially if you live in a more rural part of PEI or are looking to finance the purchase of a non-traditional home.
About Prince Edward Island (PEI)
With 156,000 residents, Prince Edward Island (PEI) is the smallest of Canada's ten provinces, both in terms of population, landmass and economic output.
PEI's economy is mainly agriculture-based, relying on farming and fishing for a sizable portion if it's GDP. In recent years, the province's economy has been pivoting towards more modern industries such as bioscience, renewable energy, and aerospace engineering.