Home Trust mortgage rates.

First, let’s establish what a prime mortgage rate is. Also known as a prime lending rate, it is the average rate of interest that a bank or other lending institution, like Home Trust, charges for funds they lend to consumers. It usually serves as the standard or starting point for negotiation on any variable loan (we talk more about variable rates below), ranging from business or vehicle loans to, of course, mortgages.

How do financial institutions set their prime rates? Banks and other creditors in Canada base their prime rate on the policy interest rate (also known as an overnight rate) set by the Bank of Canada, our country’s central bank. The Bank of Canada announces whether or not they are going to change this rate eight times a year, on set dates. Because banks and other lending institutions base their prime rate on Bank of Canada actions, and even though they are different companies, they usually all end up with roughly the same prime lending rate.

Home Trust offers variable mortgages based on their prime rate for uninsured mortgages (which they also refer to as a Classic mortgage). Usually it’s a calculation of the prime rate plus or minus an additional percentage of interest, determined for each potential borrower based on their credit rating and big picture financial situation. Since there are so many variables at play, your best bet is to search and compare Home Trust mortgage rates against other lenders using LowestRates.ca’s mortgage comparison service.

Like most other financial institutions, Home Trust publishes a baseline list of the mortgage loans they offer, accompanied by a standard rate for that type of loan. These are called posted mortgage rates and are published on their website. These rates can change regularly, and are often influenced by the rates of competitors and the Bank of Canada –– because of course every creditor wants to seem the most attractive to potential borrowers.

There are two key points to keep in mind when considering posted mortgage rates:

1. Most of the time, posted mortgage rates are not the best rate available. There are so many personal factors, specific to you as an applicant, that determine the mortgage rate you are actually eligible for. Which is not to say that posted mortgage rates should be ignored –– they are a great starting point when it comes to understanding and negotiating for the best Home Trust mortgage rates possible.
2. Even if you get better rates than those posted by Home Trust (which is likely), you may still have to qualify for your mortgage based on your financial ability to pay their prime rate/the Bank of Canada’s policy interest rate. As part of the mortgage qualification process for federally regulated lending institutions, you have to pass a “stress test” that assesses whether your income and expenses leave you with enough funds to pay back your loan. (For the record, stress tests are required even if you are refinancing your home or switching from one mortgage lender to another).

Compare all the mortgage rates Home Trust offers today by searching LowestRates.ca.

Signing up for a fixed mortgage loan rate with Home Trust means the amount of interest you pay over a set period of time –– known as a “term” –– will not change. Lenders generally have several term options available for mortgage applicants to choose from. For instance, as a baseline, Home Trust offers one, two, three, four and five year fixed rate terms. Once a term ends, if you have not paid off your mortgage, you will then have to renegotiate a new agreement with Home Trust or seek one out from a different financial institution.

Fixed rates are usually higher than loans with variable rates. But this is because they offer a few key benefits:

• You are guaranteed to have the same payments every month for the entirety of your term.
• From the outset, you’ll know the exact amount of loan you are set to pay off by the time your term ends.
• Finally, you are protected from market fluctuations that might drive interest rates up. Of course, on the flip side, if prime interest rates drop over the course of your term you will not be able to access lower payments.

Home Trust provides fixed rate mortgages as part of both their Classic and Accelerator mortgage programs. Use LowestRates.ca to find current mortgage rates from Home Trust.

Variable mortgage rates tend to be lower than fixed mortgage rates –– because variable interest rates fluctuate, depending on your lender’s prime rate, throughout whatever term (length of mortgage agreement) you have committed to .

So if you end up with a Home Trust variable mortgage, as their prime rate changes due to market conditions and the Bank of Canada, your interest rate will go up or down. It’s more of a gamble than choosing a fixed rate mortgage, because there is no way to predict if you will end up paying more or less interest. This also means you will not know how much loan repayment you are set to achieve by the end of your mortgage term.

Home Trust provides variable rate loans as part of their Classic mortgage program, which offers:

• One, two, three and five year long closed mortgages. With a closed mortgage you are likely to owe a penalty if you want to make a larger payment than your agreement allows or fully pay off your mortgage before the end of your term.
• There is also the option of a year long open mortgage, in which you have more flexibility to either make a larger payment or pay off your entire mortgage early.

Compare open and closed variable mortgage interest rates from Home Trust with LowestRates.ca quotes.

Although big banks might be the first lending option people consider for a mortgage, findings from LowestRates.ca and published by CBC News, show that smaller lenders consistently offer less expensive interest rates.

Not only can Home Trust potentially offer lower interest rates than larger competitors, but they also offer solutions for people who might otherwise struggle to qualify for a mortgage –– for example, applicants with “bruised credit.”

Their Classic mortgage program for instance is structured for borrowers who may have “non-traditional income” and offers shorter term (five years and under) open and closed, fixed and variable mortgages. Meanwhile, their Accelerator program provides fixed rate mortgages to applicants who have re-established good credit after a previous bankruptcy.

Home Trust has mortgage options for borrowers who seek to purchase or refinance “single-family dwellings, condominiums, duplexes, triplexes, store and apartment and rental properties.”

Eligibility for a variable or fixed rate mortgage with Home Trust is generally dependent on their review of your overall financial status and credit rating –– that said, the lender makes it clear they are willing to offer mortgages to applicants who may otherwise struggle to be approved for one, such as self-employed borrowers, first time home buyers and those purchasing homes who are new to Canada.

Unlike many larger institutions, Home Trust does not offer pre-approved mortgages. But as a rule of thumb, information you need to finalize your application includes:

• Government identification
• Employment and/or income information
• Banking information
• Your credit score/rating or authorization to access it
• Proof of down payment funds
• Your purchase agreement
• Other financial information like savings, investments, assets as well as debts

Being pre-approved for a mortgage can ease some of the stress of homebuying, speed up the process, and increases the chance you’ll be successful when you make a bid on a home. Pre-approval demonstrates to sellers that you are qualified to purchase the property in question. Be aware, though, that Home Trust does not offer pre-approved mortgages.

Determining how much mortgage debt you can afford is based on an assessment by Home Trust, considering elements like the value of the home you want to buy and the down payment you have saved. For Classic mortgages, which are ideal for borrowers with complicated or challenging financial backgrounds, the broker requires a minimum 20 per cent down payment. Their Accelerator mortgages, on the other hand, only require a five per cent down payment (though mortgage insurance is required), as applicants tend to have higher credit scores.

If you are approved, Home Trust will loan up to 80 percent of the appraised value of the property you are interested in purchasing, for terms of up to five years. The maximum amortization period –– how long you can take to fully pay off a mortgage loan –– on offer is 30 years.

The specifics of your negotiated agreement (such as term length, open versus closed and fixed versus variable mortgages, the dates on which you will make your loan payments etc.), will of course determine most of the conditions of your Home Trust mortgage –– especially when it comes to enforcing financial penalties if you do not keep the terms you agreed to.

As with other credit institutions, Home Trust has their own set of rules regarding payment scheduling and prepayment that are established in the application process. Some examples include:

• You may be permitted to change your regular payment schedule (for instance, moving from a monthly payment to a bi-weekly one).
• Prepayment privileges, allowing you to increase or pay off your mortgage loan earlier than expected, are allowed in some circumstances (like with an Accelerator mortgage), but likely incur a fee in others (Classic mortgages).

Be sure to read and understand all the terms and conditions related to your Home Trust mortgage loan before committing.

When your Home Trust mortgage term is about to expire, you have two options available to you if you still owe a balance on the property loan:

1. Home Trust will send you a renewal offer around 45 days before your mortgage agreement is set to end, (which they refer to as your “maturity date.”) You can choose to either accept that offer or work out different terms, but ultimately keep your mortgage with the company.
2. Or you can start the mortgage process over again (LowestRates.ca is always available to compare quotes) and move your loan to a different credit institution.

Meanwhile, if you have paid off your home loan completely, Home Trust will send you or your legal representative forms that outline the discharge of your mortgage.

The length of time it takes to pay off a mortgage is called the amortization period and is determined based on the cost of the home you are buying, the interest rates you are charged, and how much your regular payments are set up to be.

Home Trust mortgages tend to be short term (five years or less) in length, so if you have a longer amortization period, say 25 years, you will have to renew your mortgage a few times at least. Something to consider: though lengthy amortization allows for lower regular payments, it will ultimately cost you more interest in the long run.

If your plan from the get-go is to pay your mortgage off as quickly as possible, you should seek as short an amortization period as you can, coupled with as high regular loan payments as you can afford.

Home Trust also offers flexibility for those who wish to repay their loans faster, such as the option to pay up to 20 per cent of the principal loan each year, on your mortgage date anniversary. And depending on the type of mortgage you have chosen, it may also be possible to increase your regular payment amounts and/or payment frequency mid-term.

The penalty for paying off a Home Trust loan earlier than outlined in your contract depends on the type of mortgage you have.

If you have chosen an Accelerator mortgage from Home Trust, you are allowed to pay off the balance at any time, but may owe up to three months interest or a differential rate determined by the creditor. With a Classic mortgage from Home Trust, you are only allowed to break the terms of your agreement if you are selling the property. And again, you will be charged either three months interest or a differential rate.

LowestRates.ca works with 50+ banks and brokers across the country to bring you the best rates. We work with our partners to obtain their best deals and offers, and then we let them compete for your business. All you have to do is answer a few questions, and in minutes you’ll be provided with today’s mortgage rates. There’s no obligation, but you can choose to speak with our broker partner to secure your best rate and see if you're eligible for more savings.

Yes, it’s safe — you no longer need to visit a bank branch or mortgage broker’s office in person to apply for a mortgage. It’s becoming increasingly common for Canadians to apply for mortgages online. LowestRates.ca only works with reputable, trustworthy financial institutions. Your credit score won’t be affected and your information is secure. We don’t share your information with anyone unless you want to connect with a mortgage broker. We take care of the heavy lifting by comparing the market for you and can connect you with the best mortgage lenders across the country.

We have a strong selection of lenders on LowestRates.ca, including the big banks and many independent providers, and we’re adding more lenders all the time. This ensures we’re always delivering you a competitive rate. Even if you’re not ready to commit to anything, you can use our site as a starting point for research (it’s totally free, and you’re under no obligation).

The better informed you are, the more likely you'll negotiate a better deal for yourself. And, really, that’s what we care about the most.