Peoples Bank mortgage rates.

Unsure what the prime rate is? All Canadian financial institutions have a prime rate or prime lending rate. This is used to determine the interest rate on variable lending products, such as mortgages, auto loans and lines of credit.

Peoples Bank’s variable mortgage rate is influenced by its prime rate. In most cases, all financial institutions have the same prime rate. Some may have a different prime rate for mortgages, but Peoples Bank’s prime rate is the same as all the major Canadian financial institutions.

The rate may change over time with a variable rate mortgage because the prime rate is influenced by the Bank of Canada’s target for the overnight rate. During economic downturns, the Bank of Canada tends to lower the rate, as it did in March 2020. When the economy is going strong, the rate tends to rise.

The prime rate gives you an idea of what you can expect if you’re to get a variable rate mortgage from the lender. But before deciding whether or not to choose this financial institution, you should compare Peoples Bank’s mortgage rates with other lenders using LowestRates.ca.

Peoples Bank and other mortgage lenders advertise various types of mortgages and rates on their website or sometimes in their branches (Peoples Bank’s mortgage rates are online). These are called posted mortgage rates, which includes variable rate and fixed rate mortgages. However, posted rates aren’t usually the best you can get.

Mortgages will typically include different options when it comes to the length of the loan. This is called a term. Most borrowers opt for a five-year term because it’s the most common. Typically, lenders only offer three- and five-year terms, but Peoples Bank only offers a five-year term for a variable rate mortgage. Variable rates are linked to the financial institution’s prime rate and can change during the term.

Fixed rates stay the same for the life of the mortgage term. The majority of borrowers in Canada choose a fixed rate, partially because the payments stay the same for the entire term. The terms are typically six months to 10 years. Peoples Bank offers one-year, two-year, three-year, four-year, and five-year fixed rate mortgage terms.

Posted mortgage rates aren’t always the best rates you’ll be able to get. However, posted rates will give you an idea of what’s available before you start comparing rates on LowestRates.ca. Another reason why you should care about posted rates is because that’s usually the rate at which you must qualify for a mortgage, even if the actual rate you end up paying is lower.

As mentioned earlier, having a fixed rate mortgage from Peoples Bank (or any financial institution) means the interest rate stays the same for the entire term. As a result, your payments will also remain the same during the term.

That means the amount of your payment that goes towards paying down the principal (the amount you borrowed) will increase during the term while the amount that goes towards paying down interest will decrease during the term.

Fixed rates are typically higher than variable rates. Choosing a fixed rate provides a level of certainty that you can’t get with a variable rate mortgage. You’ll also be assured that your rate won’t rise if the Bank of Canada decides to increase rates, which will happen if you have a variable rate mortgage.

A fixed rate mortgage is probably right for you if you expect interest rates to rise. Peoples Bank’s fixed mortgage rates vary depending on the term you choose. Currently, you can only get a mortgage with a one, two, three, four, and five year term from this lender.

To get the best Peoples Bank mortgage interest rates, check LowestRates.ca to do some comparison shopping.

With a variable rate mortgage, the amount of interest and principal you pay will be based on Peoples Bank’s prime rate. The Bank of Canada typically makes rate announcements eight times a year, so it’s possible (but highly unlikely) that your rate could change that many times annually. The Bank of Canada has made unscheduled cuts to rates before, the most recent being in March 2020.

Having a variable rate mortgage has advantages and disadvantages. When rates go down, the amount of interest you pay declines. But when rates go up, the amount of interest you pay increases.

Variable rate mortgages typically have a fixed payment amount similar to fixed rate mortgages. But what makes them different from fixed rate mortgages is the amount of money that goes towards principal can decrease when rates rise. With a fixed rate mortgage, the amount that goes towards principal steadily increases no matter which way rates go.

A variable rate mortgage makes it difficult to determine how much you’ll owe when the term ends since you don’t know what the future holds for interest rates. However, you could end up being better off with a variable rate mortgage if rates fall during the term or don’t increase very much.

Peoples Bank offers just five-year terms for its variable rate mortgage (which it calls an adjustable rate mortgage). You can see how Peoples Bank’s current mortgage rates compare to other lenders on LowestRates.ca.

Peoples Bank calls itself an alternative lender, which makes it different from other financial institutions. For instance, it has specialty programs for borrowers who don’t meet traditional lending requirements. Its alternative lending criteria may work for customers who are self-employed, new to Canada, have issues with their credit, or have recently been discharged from bankruptcy.

Peoples Bank offers mortgage loan amounts of $200,000 to $2 million. The bank is flexible with the gross debt service (GDS) and total debt service (TDS) ratios that lenders use to determine how much a customer can borrow for a mortgage, has fully open mortgage terms of one to two years, and provides the option to make interest-only payments on mortgages.

The flexibility that Peoples Bank offers its customers isn’t typical compared to large financial institutions. This makes the lender an alternative solution for those who typically have trouble qualifying for a mortgage.

Also, having an interest-only payments mortgage isn’t unheard of, but it’s something that the big banks don’t offer. This would be ideal for someone who’s purchasing and selling a property in a short period of time (such as a house flipper or investor), using the money that would have gone towards paying their principal to invest instead, or has a salary that varies from month to month and wants to own a home.

Don’t forget to compare Peoples Bank’s mortgage loan rates with other lenders on LowestRates.ca.

To get pre-approved for a Peoples Bank mortgage, you’ll need to provide the lender with a number of details. Most lenders ask for the same information, such as:

• Salary information: The amount of income you earn annually
• Assets: Any material items that have value, including investments or a vehicle
• Down payment: The amount of money you’ve saved to put towards the cost of owning a home
• Debt: The amount you owe on any credit cards, student or car loans, and other credit products

The lender will also take a look at your credit history and score. Using all of this information, the lender will decide how much you can borrow and what the interest rate will be.

Having a pre-approval from Peoples Bank will give you an idea of how much you can afford when buying a home. You don’t want to look at homes, find one you love, apply for a mortgage, and potentially be declined.

Instead, you should get pre-approved so you can find out what you can spend and then start the home search. A pre-approval also means the lender will typically keep the rate on hold for a specific period of time. This is useful if you’re looking for homes and rates increase during that time.

You should be aware that a pre-approval is a maximum amount, but it doesn’t guarantee the lender will approve you for a mortgage.

It’s impossible to know how much Peoples Bank will lend you unless you apply. Most lenders want your gross debt service ratio (your mortgage payments, property taxes, and heating costs combined divided by your gross annual income) to be 35% or less and your total debt service ratio (your mortgage payments, property taxes, heating costs, and other debt obligations combined divided by your gross annual income) to be 42% or lower. Since Peoples Bank is an alternative lender, there may be some flexibility in these numbers and you may be able to afford more than you think.

Using a mortgage affordability calculator will also give you a rough idea of what you can afford.

The terms and conditions will depend on what’s in the mortgage contract, which can vary depending on whether you get a fixed or variable rate mortgage. The most common terms and conditions will have to do with your payments and prepayments.

You will typically be able to choose between a weekly, biweekly, or monthly mortgage payment. If you miss a payment, there may be consequences.

There are also penalties around prepayments in the form of making additional payments or paying off your mortgage early. Many lenders will only allow you to pay off a certain percentage of your original mortgage balance once a year. The terms and conditions will also outline the prepayment penalties if you pay off your mortgage in full before the term ends.

Before your term ends, you have the option of renewing your mortgage with Peoples Bank or you can look for another lender. What you decide to do is up to you, but it should be based on what rate Peoples Bank and its competitors are offering.

If you decide to renew, a renewal can be processed up to 90 days before the term ends. Also, you don’t have to requalify for a mortgage.

Alternatively, you can shop around for a new lender on LowestRates.ca by comparing Peoples Bank’s offer with mortgage rates across Canada.

The amount of time you have to pay off your mortgage is in your mortgage contract. This is called the amortization period. If you have a long amortization period, your payments will be lower and you’ll pay more interest. If you have a shorter amortization period, your payments will be higher and you won’t have to pay as much interest during that time.

Typically, amortization periods are 25 years although you may be able to get a mortgage with an amortization of 30 years. You can also usually get a shorter amortization (such as 15 or 20 years) if you’d like to pay less interest.

One way to pay off your mortgage quickly is by making prepayments. This is an extra payment you can make in addition to your regular payment, and your mortgage contract will let you know whether it’s allowed. At Peoples Bank, the annual prepayment amount is up to 20%. However, you should be careful that you don’t pay too much or you could face a prepayment charge.

You can also prepay as much as you’d like at the end of the mortgage term before you renew. And Peoples Bank lets you increase your initial payments by up to 20% every year during your mortgage term, which also helps you pay off the mortgage faster.

Of course, an amortization period of less than 25 years is another way of paying off your mortgage faster.

You will typically face a prepayment charge if you renew your mortgage before the term ends, if you refinance the mortgage and choose a new term, if you transfer the mortgage to another lender, or you pay off the mortgage in full before the last day of the term.

The amount you’ll be charged can vary depending on the type of mortgage you have and the interest rate. On a variable rate mortgage, the prepayment charge is three months’ interest on the remaining amount of your mortgage.

On a fixed rate mortgage, the prepayment charge is the greater of the interest rate differential (the difference between your current mortgage rate and the current posted rate for the remaining term of the mortgage) on the remaining amount of your mortgage or three months’ interest on the remaining amount of your mortgage.

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.