Editor’s Note: The Bank of Canada has lowered its overnight rate to 3.75%, a decrease of 0.5 percentage points. This cut makes variable mortgages easier to qualify for, but challenges — limited housing supply, elevated prices and corresponding down payment amounts — remain for home buyers.
Disclaimer: The rates displayed do not include any taxes, fees, insurance, or other additional charges. These rates are estimates and are not guaranteed. The actual rate and loan terms you receive will depend on our partner’s assessment of your creditworthiness, loan amounts, and other relevant factors. Please note that any potential savings figures provided are estimates based on the information you and our advertising partners have provided. Terms and conditions apply.
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Manitoba mortgage rate update: October 2024
October’s shaping up to be a fairly decent month for Manitoba mortgage shoppers.
Both three- and five-year fixed mortgage rates have drifted close to 4.3% at some brokerages. That’s not cheap by historical standards, but it’s a lot easier to qualify for than 5%, which is where fixed rates were earlier this year.
Based on recent government bond activity, fixed rates might be as low as they’re going to get for the foreseeable future. Thankfully, the Bank of Canada is helping make variable rates more attractive.
The Bank announced an aggressive reduction to its overnight rate on October 23. The 50 basis point cut brought the country’s lowest variable mortgage rates down to around 4.75%.
With further rate cuts expected, it might be worth paying a little more for a variable-rate mortgage today rather than locking into a lower fixed rate.
Historical trend: New mortgage loans in Manitoba
The average mortgage rate in Manitoba
There’s no single average for mortgage rates in Manitoba. Even if you had access to all the current mortgage rates being offered by lenders in Manitoba, it wouldn’t be much help when you’re mortgage shopping. That’s because the mortgage offer you receive is always specific to you and takes into account multiple factors like your credit score, the type of mortgage you want and the amount you need to borrow.
Think about the “average mortgage rate” the way you would Manitoba’s average home price. It’s interesting data to have, but it’s not necessarily relevant to your own home buying journey.
2024 Manitoba mortgage rate forecast
Variable mortgage rates
After the Bank of Canada’s decision to lower its overnight rate on September 4th, variable mortgage rates continue shrinking. A reduction in the overnight rate typically leads to an identical decline in lenders’ variable rates.
How many times variables dip in the last half of 2024 remains to be seen. The Bank of Canada will be cautious about cutting the overnight rate too quickly, which could trigger another rise in inflation. Another two modest cuts by year end is a reasonable expectation.
Fixed mortgage rates
Because they’re determined by the government bond market, which is driven by investors’ decisions, fixed mortgage rates can be difficult to project over the long-term.
Prior to August 2024’s stock market turbulence, analysts weren’t expecting fixed mortgage rates to fall drastically before the end of 2024. But three-year bond yields quickly sank to their lowest point since April 2022, five-year yields dipped lower than they’ve been in over a year, and fixed mortgage rates edged below 4.3% in some cases. None of this was predicted.
Barring any more investor panic attacks, fixed rates should stay comfortably above 4% for the rest of the year.
Mortgage calculators to inform your home buying decisions
Manitoba housing market update – October 2024
Manitoba’s housing market was subdued in September 2024, according to data from the Manitoba Real Estate Association. Home sales were down almost 17% compared to August, which may indicate a challenging fall market for sellers.
In addition to sales, new listings and the provincial average sale price were also down in September. The average price for homes sold last month was $362,137. The average sale price in Winnipeg was just over $374,000.
Manitoba 2024 home sales and price forecast
After two years of falling sales, Manitoba’s housing market is projected to experience a modest rebound in 2024. The Canadian Real Estate Association (CREA) expects sales in the province to rise by 6.1% — about 850 sales — compared to 2023.
The average sale price in Manitoba could remain flat for most of 2024. CREA estimates that the average price will increase by 1.2% to $354,206.
Manitoba first-time home buyer programs
First-time home buyers in Manitoba may qualify for programs, including the Rural Homeownership Program.[1] Under this program you may be eligible to receive up to 15% of the purchase price of a first home depending on where you live and your income. If you live in the home long enough, you do not need to repay it.
Land transfer taxes in Manitoba
The purchaser of a home in Manitoba must pay a land transfer tax based on the value of the home.[2] The tiered-rate system means more expensive homes result in a higher rate. You’ll pay:
- No tax for the first $30,000 of your home’s value.
- 0.5% for any amount between $30,001 and $90,000.
- 1.0% for any amount between $90,001 and $150,000.
- 1.5% for any amount between $150,001 and $200,000.
- 2.% for any amount over $200,000.
Types of lenders in Manitoba
Mortgage lenders in Manitoba tend to fall into four categories, which include:
- Large chartered banks such as Scotiabank, RBC and TD.
- Credit unions such as Assiniboine Credit Union and Compass Credit Union.
- B lenders that work with borrowers with lower credit scores, such as MCAN and Equitable Bank.
- Private lenders, who typically deal with borrowers in need of short-term funding.
Types of mortgages in Manitoba
Fixed-rate mortgages
The interest rate stays the same for the duration of the mortgage term in a fixed-rate mortgage, even if the market fluctuates. Fixed rates typically:
- Are higher than variable interest rates.
- Provide a greater sense of certainty. You can count on it remaining stable for the length of the mortgage term.
Variable-rate mortgages
Variable mortgage rates increase or decrease whenever your lender’s prime rate increases or decreases. Variable-rate mortgages typically have rates that:
- Can be lower than fixed rates at the time you apply for mortgages. Variable rates can save borrowers money over the length of their mortgage — but only if rates remain the same or fall.
- Can increase throughout a mortgage term. When interest rates go up, the monthly payment on a variable-rate mortgage can become more expensive.
» MORE: The difference between fixed- and variable-rate mortgages
Hybrid-rate mortgages
A portion of your mortgage is subject to a variable rate and another portion is at a fixed rate of interest. These mortgages:
- Can dampen the impact of fluctuating interest rates in a particularly turbulent or uncertain economy.
- Tend to be more difficult to transfer between lenders.
Insured and uninsured mortgages
If you buy a home for under $1 million, and your down payment is under 20%, you must insure your mortgage. Mortgage insurance adds to the cost of your loan. The cost of insurance equals a percentage of your mortgage, and the percentage depends on your down payment. The closer it is to 20%, the smaller your insurance payment is.
Homes worth $1 million or more require a down payment of at least 20%, so insurance is not required.
Short-term and long-term mortgages
Short-term mortgages last five years or less. Long-term mortgages last over five years. With a shorter mortgage, you’ll need to renew sooner, which can provide flexibility. Short-term mortgages often have lower interest rates than long-term mortgage rates.
Closed and open mortgages
The primary difference between closed and open mortgages is that you can pay off an open mortgage whenever you like and not pay a penalty. If you have a closed mortgage and make additional payments, you’ll generally be penalized.
Closed mortgages often offer better rates than open mortgages. But open rate mortgages may be a good option if you think you may be able to pay off your mortgage early.
How Manitoba lenders determine mortgage rates
The mortgage rate you’re offered by a lender in Manitoba will be based on two primary factors; one depends on the state of the economy, the other on your financial situation.
Economic factors
Variable mortgage rates are influenced by the Bank of Canada’s overnight rate. When the overnight rate increases or decreases, a lender’s prime rate follows suit. Variable mortgage rates are based on a lender’s prime rate, so as the prime rate rises or falls, so do variable rates.
Fixed mortgage rates are determined by activity in the government bond market, particularly the yields on one-, three- and five-year bonds. Fixed mortgage rates follow the movement of those yields.
Your financial situation
Factors specific to you also affect the rates you’re offered. These include:
- Your credit score.
- Your income.
- Your total debts.
- The loan type you choose.
- The amount you’re borrowing.
- The term length and amortization period of your loan.
Lenders look for signs of risk when assessing these aspects of your finances. The riskier they perceive you to be as a borrower, the higher the rate they’re likely to offer you.
How to qualify for a lower mortgage rate in Manitoba
Some factors behind rates are beyond your control, but there are steps you can take to encourage lenders to offer you the best mortgage rates. For example, you can:
- Improve your credit score. A higher credit score generally results in better offers. Get a better score by eliminating existing debt and paying future bills in full and on time.
- Increase your income. It’s not always easy, but any additional income will improve your financial position. Lenders look at your income to assess your ability to afford a mortgage.
- Decrease your total debts. Pay down personal loans, student loans or other types of debts. Lenders consider your total debt load when determining the details of your loan.
- Consider all your options. See if adjusting the loan type, the term length or the amortization period of your loan could help.
Factors that affect mortgage affordability in Manitoba
A home’s price and the rate you’re offered aren’t the only factors that affect how much mortgage you can afford. You’ll also have to account for the following components, which play a role in all mortgages.
Debt service ratios
Lenders use debt service ratios to determine how much of your income goes toward paying debt. If those ratios are too high, you may not qualify for the mortgage amount you need.
Car loans, credit cards and lines of credit are all examples of debt that require regular payments. Decreasing some of these balances, or relying less heavily on credit, can help you lower your debt service ratios.
The mortgage stress test
You will have to pass the mortgage stress test if you want a home purchase funded by a federally regulated financial institution.
The rules of the stress test say you must qualify for a mortgage at a minimum qualifying rate of either 5.25% or the rate you’re offered plus 2%, whichever is higher. If a lender offers you a rate of 5%, for example, you’ll have to demonstrate you can afford the same mortgage at 7%.
You may be able to avoid the stress test if you apply for a mortgage with a lender that is not federally regulated, like a credit union.
Your down payment
Your down payment is a critically important factor in determining mortgage affordability. The more you can put down, the less you’ll need to borrow. Your monthly mortgage payment will likely be smaller, and you’ll pay less in interest.
Mortgage term
The term is the length of time your mortgage contract is valid. In Canada, mortgage terms can run anywhere from six months to as long as 10 years.
Chances are that your mortgage will have multiple terms during the amortization period until you pay it off in full. Once your mortgage term ends, you can pay your loan off in full, renew it or refinance it.
Amortization period
A mortgage’s amortization period is the time it will take to pay off the loan in full. In Canada, the most common amortization period is 25 years. If your down payment is less than 20%, you can’t have an amortization beyond 25 years.
If your down payment is greater than 20%, you may find some lenders willing to offer amortization periods of up to 35 years.
Why would you want a longer amortization period? The longer your mortgage lasts, the smaller your monthly payment will be. You’ll pay more in interest, but that might be a worthwhile trade-off if it helps you keep your home.
Mortgage shopping is about more than the interest rate
A low mortgage rate is usually a primary objective for buyers, but getting the lowest rate doesn’t necessarily mean you’re getting the best mortgage for your needs.
For example, you might opt for a fixed rate, which has a higher rate than a variable rate, if you’re uncomfortable with the risk of rates rising. Or, if you expect to come into a sizable sum of money soon (via an inheritance, for example), paying a higher rate for an open mortgage, which allows you to pay it off early without penalties, could be worth it.
Frequently asked questions for Manitoba mortgage rates
As of October 2024, Manitoba lenders were offering fixed mortgage rates below 4.3% and variable mortgage rates for 5.4% or less on certain home purchases.
Mortgage rates have come down considerably in 2024. Three- and five-year fixed rates are nearing 4%, but may have reached their bottom for this year. Variable mortgage rates have already dropped by 75 basis points and will keep declining with every Bank of Canada rate cut.
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