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Are you hunting for the best mortgage rates in Penticton, B.C., Canada? LowestRates.ca is here to help you get the cheapest mortgage rates on the market. We work with the best mortgage lenders in Penticton and across Canada, making comparison shopping easy.

LowestRates.ca allows you to compare mortgage rates in Penticton from 50+ banks and brokers across Canada. Just tell us whether you’re buying a home, renewing or refinancing and click the “Get Started” button above.

If you’re looking to deepen your knowledge of the mortgage process before starting your application, we can help with that, too. Read on for important insights that will help you choose the right financing option.

When you’re ready to shop, use our fast, free online quote tool above to see current mortgage rates in Penticton.

Variable Rates

As low as

5.50%

Fixed Rates

As low as

4.39%

Cha-ching! Our rates are always lower than the posted bank rates.

Current lowest posted bank rate

6.84%

Conventional vs. high-ratio mortgages: which is cheaper?

On LowestRates.ca, you can start an application for different kinds of mortgage products, so it’s important to understand what financing option is the best fit for you. Depending on the size of your down payment, your mortgage will be considered either conventional or high-ratio. So, which one is likely to land you the cheapest mortgage rates in Penticton?

Conventional mortgage: Your mortgage is considered conventional if your down payment is at least 20% of your new home’s purchase price. This means your mortgage will be 80% or less of the amount needed to complete the purchase. If your mortgage is conventional, you don’t need to buy mortgage default insurance.

High-ratio mortgage: Your mortgage is considered high-ratio if your down payment is below 20% of the home’s purchase price. This means your mortgage represents more than 80% of the amount needed to complete the purchase. If your mortgage is high ratio, purchasing mortgage default insurance is mandatory. You can buy mortgage default insurance from the Canada Mortgage and Housing Corporation (CMHC), Sagen or Canada Guaranty.

Whatever type of mortgage option you select, LowestRates.ca can help you find the lowest mortgage interest rates in Penticton. Just scroll to the top of this page and enter a few key details about your mortgage needs. You’ll get quotes from multiple lenders and brokers in minutes. It’s the easiest way to run a mortgage rates comparison in Penticton.

Conventional 5-year fixed mortgage rates vs. high ratio 5-year fixed mortgage rates in British Columbia

Date	Average Conventional Rate	Average High Ratio Rate
01/24	5.24%	4.72%
02/24	4.84%	4.72%
04/24	4.74%	4.39%
05/24	4.84%	4.39%
06/24	5.24%	4.39%
07/24	4.74%	4.39%
08/24	4.90%	4.51%
09/24	4.84%	4.79%
10/24	4.80%	4.79%

Last Updated: November 1, 2024

Fixed rate vs. variable rate mortgages: which is cheaper?

One essential difference in mortgage products is whether the interest rate changes or stays steady throughout your mortgage term. This is the main difference between fixed and variable mortgage rates. But there’s a little more to it than that. Interest rates vary between these mortgage types, so it’s smart to know the difference if you want to get the best mortgage rates on your Penticton property.

Fixed-rate mortgages: With a fixed-rate home loan, you lock in your mortgage rate at the start and it never changes during the mortgage term. Fixed mortgage rates in Penticton and across Canada are generally slightly higher than variable rates, but there’s a good reason for that. The lender absorbs more of the risk of fluctuating interest rates in the overall economy. If interest rates go down, you could miss out on some savings, but if interest rates go up, you’re protected. This security and predictability make fixed-rate mortgages the most popular choice among Canadian homebuyers.

Variable-rate mortgages: With a variable-rate home loan, your mortgage rate adjusts according to a formula provided in your mortgage contract. It’s typically tied to the lender’s prime rate, which changes along with larger economic trends. Variable mortgage rates in Penticton, as throughout Canada, are usually slightly lower than fixed mortgage rates. But a variable-rate mortgage leaves the homebuyer more susceptible to market swings, which can lead to higher interest payments and make it more expensive to pay off your home. However, if interest rates go down, a buyer with a variable-rate mortgage can benefit. Variable-rate mortgages provide less stability and certainty than fixed-rate mortgages, making them a less appealing option for most homebuyers.

5-year fixed vs. 5-year variable mortgage rates in British Columbia

Month	Fixed	Variable
11/23	4.79%	5.90%
12/23	4.89%	5.90%
01/24	4.80%	5.90%
02/24	4.84%	5.90%
03/24	4.54%	5.90%
04/24	4.60%	5.90%
05/24	4.84%	5.90%
06/24	4.92%	5.90%
07/24	4.74%	6.05%
08/24	4.78%	6.05%
09/24	4.79%	6.05%
10/24	4.79%	6.35%

Last Updated: November 1, 2024

Factors that affect your Penticton mortgage rate

To lock in the lowest Penticton home mortgage rates, it helps to understand how rates are determined. When lenders look at your mortgage application, they weigh several factors in deciding whether to approve it, how much to lend you, and what kinds of interest rates to offer.

Here are the main factors lenders consider when to calculate your Penticton mortgage rates:

Down payment: Lenders typically set the lowest mortgage interest rates for Penticton buyers when they make a minimum 20% down payment on their home. You may still qualify for a mortgage with a smaller down payment amount, but your interest rates are likely to be higher. Lenders see smaller down payments as signs of riskier borrowers. Another advantage to making a minimum 20% down payment is that you won’t have to buy CMHC mortgage insurance.

Debt service ratios: Mortgage companies in Penticton use these formulas to get a sense of your other financial obligations and whether your new home fits into your budget.

Here are the two major types of debt service ratios lenders use:

Gross debt service (GDS) ratio: This ratio compares your income to your housing expenses. In this formula, your housing expenses include your monthly mortgage payment, property taxes and heating costs. Lenders prefer borrowers who will spend less than 39% of their gross annual income on these items if their mortgage is approved.
Total debt service (TDS) ratio: This ratio compares your income to your housing expenses along with any other regular debt payments you must make. These could include car loan, student loan and credit card payments. Lenders prefer borrowers who will spend less than 44% of their gross annual income on these costs if their mortgage is approved.

Credit score: Your credit score is a number ranging from 300 to 900 that is based on your previous use of credit. The most responsible borrowers have higher numbers, while less responsible borrowers have lower scores. Higher scores indicate that a borrower is experienced in using credit, has a history of making timely repayments and doesn’t max out all their available credit lines. Major Canadians lenders typically require a credit score of at least 600 to approve you for a mortgage loan. The minimum credit score to qualify for CMHC mortgage insurance through the Canada Mortgage and Housing Corporation is 680. You’ll need mortgage insurance if your down payment is less than 20% of the price of your home.

Income and employment: Lenders want a picture of the amounts and types of income you receive to help you repay your mortgage. You’ll need to include employment income and provide details about your type of employment, whether it’s permanent and full-time, seasonal, part-time or freelance, and whether you are paid by the hour or salaried. Lenders will also want to know how long you’ve been with your current employer. If you’re self-employed, you will need to provide extra documents. This could include several years of tax records, GST/HST account information, articles of incorporation for your business, and more. Along with your paycheques, lenders will ask about other sources of income, like investments and rental properties.

Typical mortgage amounts in Penticton

The size of your Penticton mortgage will depend on the market where your new home is located, your down payment amount and your mortgage interest rate. For an example, see LowestRates.ca’s handy mortgage payment calculator.

Sales data from September 2021 shows the benchmark price for a single-family detached home in the south Okanagan region is $675,600, according to the Association of Interior Realtors. Assuming you make a 20% down payment of $135,120, the principal balance on your mortgage would be $540,480. To calculate the total cost of your mortgage, you’ll need to add interest payments to this figure, based on your Penticton house mortgage rates.

If you plan to make a down payment less than 20% of your home’s purchase price, you’ll need to factor in the cost of the required CMHC mortgage insurance.

Penticton’s housing market and home prices

Home prices in Penticton have been on the rise in recent years, along with prices across Canada. The benchmark price for a single-family detached home in the south Okanagan region is $675,600 according to September 2021 sales data reported by the Association of Interior Realtors. This represents a 37.1% year-over-year increase from the same period last year.

The benchmark price for a townhome is $447,200, and for a condo, it’s $354,900, representing price jumps of 27.5% and 20.5% respectively over the same month a year ago.

Penticton closing costs and land transfer tax

Closing costs are all the assorted expenses that allow you to finalize your home purchase. You should expect to spend anywhere from 1.5% to 4% of your home’s sale price on closing costs, beyond the down payment amount.

Closing costs can include:

Land surveying
Title insurance
Property valuation fees
Home inspection
Attorney fees
Property tax adjustment
Premiums for homeowners insurance
CMHC mortgage default insurance
Goods and services tax (GST) or harmonized sales tax (HST) if your home or condo is new construction

Penticton homebuyers will also need to factor into their closing costs the British Columbia provincial land transfer tax. There rates are based on your home’s fair market value:

1% for homes valued up to $200,000
2% for homes valued above $200,000 and up to $2,000,000
3% for homes valued above $2,000,000
An an additional 2% tax applies to homes valued over $3,000,000

Use LowestRates.ca’s land transfer tax calculator to find the exact cost of the property transfer tax on your Penticton home.

An additional 20% tax applies to property sales within certain parts of British Columbia for foreign nationals and corporations, but fortunately this does not apply to homes within Penticton.

British Columbia offers a homeowner grant to reduce the cost of your property tax. This applies to provincial homeowners who pay municipal property tax and who are Canadian citizens or permanent residents. The grant only applies to your principal residence (summer cottages and rental properties are excluded). To receive the full grant amount, your home’s assessed value must be $1,625,000 or less. For homes in Penticton the full grant amount is $770. You have to apply to the province to receive the grant each year. Additional grants are available to homeowners who are veterans, disabled, senior citizens, the spouse or relative of a deceased homeowner, and homeowners living with a disabled spouse or relative.

Information for first-time home buyers in Penticton

Finding lower-than-average mortgage rates for your Penticton home loan is a surefire way to save money on your first home purchase. There are a few other things first-time homebuyers should know to avoid unnecessary costs and keep the homebuying process moving along smoothly.

Down payment: The size of your down payment determines the size of your home loan. It’s also one of the main things banks look for in setting your mortgage rates.

Canada’s federal government sets rules about the size of down payment you must make relative to your home’s purchase price:

If the home costs $500,000 or less: The down payment must be at least 5% of the purchase price.
If the home costs $500,000 to $999,999: The down payment must be at least 5% of the first $500,000 of the home’s purchase price, and 10% for the amount of the purchase price above $500,000.
If the home costs $1 million or more: The down payment must be at least 20% of the purchase price.

If you choose to purchase a home with a down payment amount below 20% of the purchase price, be sure to budget for the required CMHC mortgage insurance.

First-Time Home Buyers' Tax Credit: Canada’s federal government provides a nationwide, non-refundable $5,000 tax credit for first-time homebuyers.

B.C. First Time Home Buyers’ Program: British Columbia cancels or reduces the provincial land transfer tax for eligible first-time homebuyers. You must be a Canadian citizen or permanent resident and have lived in the province for at least a year, or have filed your tax return as a British Columbia resident for at least two of the previous six years in order to qualify.

To be eligible for the full tax exemption, your property must be assessed at $500,000 or less and be 0.5 hectares or smaller. If your home is valued above $500,000 but not more than $525,000, the property is larger than 0.5 hectares or includes a building besides your principal residence, you may qualify for a partial tax exemption.

GST/HST New Housing rebate: This applies to purchases of new or substantially renovated homes. This rebate reimburses you for some of the Goods and Services Tax (GST) or the federal part of the Harmonized Sales Tax (HST) that are charged on these home sales.

Federal Home Accessibility Tax (HATC) for Seniors and Persons with Disabilities: If you are 65+ or disabled, this federal non-refundable tax credit allows you to claim up to $10,000 in renovation costs to help make your home more accessible.

Banks vs. brokers: If you’re a first-time homebuyer, you should know that there are two ways to secure a mortgage: through a mortgage broker, or directly through a lender like a bank or credit union. Lenders set mortgage rates according to their own standards and formulas. Bank mortgage rates in Penticton are limited to what that particular institution offers, so you’ll need to shop around to find the best deal. Some home buyers prefer working with a lender they already have a relationship with, because of the familiarity and the convenience of having some of their financial information already on file with that institution. Mortgage brokers are the other option. Brokers access mortgage rates in Penticton from numerous lenders, including banks and credit unions, so they can assist you in navigating the market and comparing rates and mortgage products. Working with a broker can make the mortgage shopping process more efficient.

With LowestRates.ca, you can shop all of Canada’s leading lenders and brokers in one convenient online location. We offer a quick and simple solution to pinpoint the best mortgage product for you, and secure the lowest rates available on the market.

Your questions about Penticton mortgages, answered.

What’s the difference between a mortgage term and an amortization period?

The amortization period is the full amount of time it will take you to pay off your Penticton mortgage loan. The mortgage term is the time period you’re committed to a specific lender and mortgage contract.

In Canada, amortization periods are typically 25 years. This is the longest timeline the Canada Mortgage and Housing Corporation allows if you need to buy CMHC mortgage default insurance (for buyers making a down payment less than 20% of their home’s purchase price).

Within the amortization period, buyers usually have multiple mortgage terms and mortgage contracts that must be renewed until the loan is paid in full. Mortgage terms can range from six months to 10 years, but five years is most common.

What’s the difference between an open mortgage vs. a closed mortgage?

Open and closed mortgages are designed to meet different homebuyer needs. They also play a role in today’s mortgage rates in Penticton.

Open mortgages have the most built-in flexibility about the rate of repayment. They don’t penalize you for making accelerated payments or paying off your mortgage early. These types of mortgages are ideal for homebuyers who know they will want to move to a new home, sell or refinance before their mortgage term is up.

Closed mortgages are the most popular choice of Canadian homebuyers. With a closed mortgage, you face more penalties if you decide to pay off your home loan early, refinance or make accelerated payments, but in exchange you’re likely to see lower mortgage rates for your Penticton home purchase. Many lenders allow some limited extra payments on their closed mortgage products, with no penalties if you follow certain guidelines. If you want to make extra payments, just be sure you understand what’s allowed in your mortgage contract.

How much does it cost to live in Penticton?

Penticton lies in the southern Okanagan Valley of British Columbia between Okanagan and Skaha Lakes. The region’s sunny climate, vineyards, wineries and beaches offer an appealing lifestyle for Penticton’s 33,000 residents. The cost of living in Penticton depends on whether you have dependents, own a home or rent, and drive a personal vehicle or rely on transit.

The benchmark price for a single-family detached home in the south Okanagan region is $675,600 according to September 2021 sales data reported by the Association of Interior Realtors. This figure is high compared to home prices in other parts of the country, but affordable by provincial standards.

British Columbia drivers pay the highest rates for auto insurance in Canada, so if you own a vehicle, be prepared to factor this into your cost of living. According to the Insurance Bureau of Canada, the average annual cost of auto insurance premiums in B.C. is $1,832. Drivers in the province are required to purchase their mandatory minimum auto coverage through a crown corporation called Autoplan, with the option to add additional coverage through private insurance providers.

How much does getting a lower interest rate matter in Penticton?

Finding the lowest mortgage rates in Penticton is a great way to save money on your home purchase. However, there are other factors that will impact how much you spend. Here are a few other factors that can impact your mortgage costs:

Prepayment privileges: These are terms in your mortgage contract that explain what loan repayments are permitted without penalty, beyond the monthly minimums.

Penalties: All mortgage contracts have penalty fees that may kick in if you don’t follow certain rules. Common penalties include fees for paying your mortgage in full ahead of schedule, selling or refinancing before the mortgage term is up, or making more rapid repayments not allowed under your prepayment privileges.

Portability: This allows you to transfer your mortgage to a new home without facing penalty fees. Typically, a new mortgage is added to your old one to cover any additional cost. If you think you would like to move to a new home and sell your old one during your mortgage term, you can negotiate with your lender for a portable mortgage before signing the contract.

Your questions about LowestRates.ca, answered.

How are mortgage rates determined on LowestRates.ca?

LowestRates.ca works with 50+ banks and brokers to bring you competitive mortgage rates from lenders in Canada. 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.

Is it safe to get a mortgage online?

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 in the country.

How do I know I’m getting the lowest rate?

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.

Jane Switzer

About the Author

Jane Switzer is a writer, editor and native Torontonian. She got her start working in daily journalism, and is now a Content Manager for LowestRates.ca.

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