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Best Mortgage Rates in Barrie 2021
When looking at Ontario real estate, the pattern has always been to look at the two specific areas for trends. The regions being the golden horseshoe (Toronto and Hamilton specifically) and Ottawa. However, for those in the industry, Barrie has been an exciting market to watch due to the city’s unique location. So, let us jump into why the Barrie real estate market is such an interesting test case and touch on some ways to help you secure great mortgage rates in Barrie and the surrounding area.
Barrie Real Estate Market
Barrie, known as the regional capital and centre of Central Ontario, has long been the unofficial gateway to cottage country. The city is located on Lake Simcoe’s shore, and as per the last Canadian census, is home to just under 200,000 people. The city boasts a diverse economy with education, healthcare and information technology as the main sectors. With its access to Go Transit and location, Barrie has become a bedroom community for those with work in and around the GTA. Whether you are looking to settle down outside of the city or want to put down roots in a family-oriented town, Barrie is an excellent option for anyone looking for affordable housing in the golden horseshoe.
The Barrie real estate market is in a boom, and to be perfectly honest, it is not slowing down anytime soon. Spurred on by people moving from larger city cores such as Toronto and Hamilton, Barrie has quickly become a booming investment and family housing market. The recent COVID-19 pandemic has only increased the boom. Many living in downtown complexes started to look to rural or suburban housing as the lockdowns and restrictions continued to affect downtown cores. Barrie is not the only housing market seeing this boom; Central Ontario is experiencing a seller’s market that they have not seen in generations.
Back in Barrie, according to Barrie and District Associate of Realtors, residential sales rose 23.6% in 2020. During this same period, the benchmark price rose to $613,200, representing a 23.3% rise in year-over-year pricing.
Looking at these same stats:
- Single-family detached homes were up 24% and sold for an average of $644,000
- Townhouses were up 28.8%, with an average cost of $440,600
- Condos were up 11.3%, with an average cost of $372,800
These stats back up what we have seen in the market; Barrie is a hotbed. What is it about Barrie making it one of the hottest real estate markets in the province?
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Historical Mortgage Rates in Barrie
When it comes to Barrie’s mortgage rates, the numbers have never been as low as we have seen in 2020 and 2021. Here are a few of the mortgage rates we have seen over the years in and around Barrie. We have divided up these historical numbers into 1 year fixed, 3 year fixed, 5 year fixed mortgage rates, as well as the 5 year variable mortgage rate to let you compare rates over the years.
| Year | 1Y | 3Y | 5Y | 5Y Variable |
|---|---|---|---|---|
| 1980 | 13.75% | 14.25% | 14.50% | 13.45% |
| 1985 | 10.00% | 11.25% | 11.75% | 10.20% |
| 1990 | 13.25% | 13.25% | 13.25% | 13.95% |
| 1995 | 8.13% | 8.63% | 8.95% | 7.95% |
| 2000 | 7.90% | 8.13% | 8.30% | 7.20% |
| 2005 | 4.90% | 5.60% | 6.05% | 3.95% |
| 2010 | 3.55% | 4.15% | 5.42% | 2.2% |
| 2015 | 2.89% | 3.39% | 4.64% | 2.55% |
| 2020 | 3.19% | 3.89% | 4.94% | 2.15% |
FAQs
How much can I save by comparing Barrie mortgage rates?
Naturally, with rates as low as they are in 2021, shopping around for your mortgage rate is an innovative and often beneficial financial plan for home buyers. Here is some quick math that will showcase why a difference of even a single percentage should be worth any home buyer to compare their mortgage rate with their company to other lenders.
For ease, let us use a nice round number being $300,00 for a mortgage.
With a 4.5% fixed interest rate on a 30-year mortgage term, you would pay a total of $547,200 over the life of the mortgage; this includes $247,220 of interest. The monthly payments for this interest rate would be about $1520 per month.
With a 3.5% mortgage rate on the same 30-year mortgage term, you would pay a total of $484,968, including the $184,968 of interest. The monthly payments on this mortgage would be $1347.
For those of you who don’t like doing the math, the results are staggering. On a 30 year term at 4.5%, your monthly mortgage payment is $173 per month more. So over the lifetime of your mortgage term, you are saving $62,232 by going with the lower rate. You could buy an Audi RS 3, BMW M340I or even a Tesla 3 with that!
We should note that the above calculations are based on a 30-year term in Canada, which you cannot get. However, we thought it would be ok to use the ease of calculations to demonstrate that your interest rate is a significant factor when considering your mortgage lender.
Not all lenders provide the same rates, and although they are based on the Bank of Canada rate, there are discrepancies based on several factors, including but not limited to market data, down payment amount, your credit score, fees and the price of the home.
Are Barrie mortgage rates higher than other cities?
Specific cities mortgage rates will generally depend on the amount of competition in the town and the surrounding area. Barrie, which sits within the golden horseshoe, is not short of competition and has all major lenders competing for mortgages. This means that Barrie is a competitive market and will not have a higher mortgage rate than other cities in the surrounding area.
You may see higher rates or lower rates when you go through your actual mortgage application. The reason for this is around eligibility and the calculations that lenders will run to generate a mortgage rate. Things such as putting down less than 20 per cent of a down payment, having a poor credit score and the properties intended use may impact your interest rate. Also, specific lenders have fees added to the rate, and thus, most lenders will vary depending on your particular circumstances.
As lenders will vary, it is often best practice to shop around to find the best rates. Although you can do this by yourself, one of the easiest ways to find the best rate is to use a mortgage broker. These professionals can search multiple lenders and provide you with a rate that typically beats advertised rates by the big banks. No matter if you are looking for fixed rates or variable rates, mortgage brokers can be a great tool to find the city’s lowest rates!
What's the difference between variable and fixed rates?
A fixed rate loan is a loan that the loan’s interest rate is fixed over the loan term. No matter if the Bank of Canada rate drops or rises, the interest rate will remain the same over the agreed-upon term. Fixed rate loans can come in any of the following: 1 year fixed, 2 year fixed, 3 year fixed, 4 year fixed and 5 year fixed.
These loans are a great option when a borrower believes that the interest rates are low and rise over time.
A variable rate loan is a loan in which the interest rate will vary with the market rate. In Canada, these loans are tied to the Bank of Canada interest rate plus your lenders’ fees, which can be found in the loan terms and conditions.
These loans are an excellent option for borrowers who believe that the interest rates will continue to drop and do not want to lock in at a potential higher rate for a term.
Is it worth getting a mortgage rate pre-approval?
Yes, a mortgage pre-approval is worth the effort to get. The reason for this is simple, with a pre-approval, you can understand what you can afford and the limits of your potential mortgage. With this information, you can narrow your search and find that ideal home in Barrie with certainty that you will be approved for the mortgage amount.
Note that although your pre-approval is with lender X, you do not have to get your mortgage at that same lender. Shop around, or use a mortgage broker to get the lowest rate when it comes to signing on for your current mortgage.
Which bank has the best mortgage rates in Barrie?
As we noted, the best rates for your mortgage will depend on a wide variety of data, including the type of mortgage, the purchase price, if you are using mortgage default insurance and even the prices in the neighbourhood. Chances are your price will be a little different than the advertised price, which is why you should compare prices before signing to ensure you are getting the lowest rates. The current mortgage rates can be found here.
Should I use a mortgage broker in Barrie?
Yes! Mortgage brokers are experts in navigating the often complex mortgage and default insurance industry. Your mortgage broker will work with you to ensure that you find the best rate for your situation and answer any questions along the way. Whether it is getting your pre-approval, or a mortgage, mortgage brokers can help you through the process.
It Is challenging work to find the best mortgage rates in Barrie, but your local mortgage broker is up to the task. Let them do the hard work of securing the best mortgage rates, and you can focus on closing on your dream home!