Halifax-Dartmouth Mortgage Rates

Halifax, an Atlantic Ocean port in eastern Canada, is the provincial capital of Nova Scotia. A major business centre, it’s also known for its maritime history.

Shopping around is the process of looking for the best mortgage rate and comparing mortgage rates between lenders. The reason it is so important to shop around before getting a mortgage is because finding the lowest interest rate in Halifax can save you thousands of dollars in interest costs throughout the life of your mortgage term.

If you choose to look for the best mortgage rate yourself, this process will start with you researching mortgage lenders and mortgage rate offerings. From here, meeting with multiple lenders and negotiating to get the best mortgage rate with each lender you meet with will help you determine the best option out there. Finally, after all the meetings are done, choosing the lender with the best mortgage rate is the last step.

The process for finding a mortgage in Halifax with a mortgage broker is even simpler, where you meet with a broker who will negotiate with lenders on your behalf. After your broker finds you the best rates, you are able to choose between them.

Besides just helping you to find the best mortgage rate in Halifax, Mortgage brokers can also help find you a mortgage in complex situations. This may include finding you a self-employed mortgage with no income verification, finding you a mortgage for bad credit, or even finding you a mortgage as a newcomer to Canada with no credit history.

There are over 80 Halifax mortgage brokers that you will be able to turn to in order to help you find the best mortgage rate Halifax offers. Besides just Halifax, there are over 140 mortgage brokers in Nova Scotia, meaning that finding the best mortgage rate can be done easily across the province. Some of the largest mortgage brokers in Halifax are:

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Over the last few decades, a variable rate mortgage may have saved you the most in interest costs as prime lending rates fell. Looking forward, the best option will likely be a fixed-rate mortgage. This is because Nova Scotia mortgage rates are at the lowest level they have ever been, with some 5-year fixed mortgage rates lower than 2%. It is also likely that current Halifax mortgage interest rates are close to their lowest possible point, with the overnight interest rate set by the Bank of Canada at 0.25%. In order for prime rates and Halifax mortgage rates to go much lower, it would take the overnight interest rate turning negative, something that is very unlikely to happen in Canada.

In addition to rates being at their lowest level ever seen, it is likely that the Bank of Canada will move to raise interest rates in 2022 or 2023, with the economy recovering nicely from the pandemic, and with inflation occurring in many everyday goods. If this were to happen and you had a variable rate mortgage, the interest rate on your mortgage would rise. By getting a fixed rate mortgage in Halifax, even if rates were to rise, you would have the same interest rate over your entire mortgage term.

You mortgage affordability is determined by your income level and your down payment amount. If you are unable to meet the minimum down payment requirement to purchase a home with mortgage insurance, you will not be able to afford that home with a traditional mortgage. As well, to pass the mortgage stress test, your housing and your debt related expenses cannot be above 44% of your gross income, and your housing related expenses alone cannot be above 39% of your gross income. If either is the case, you will fail the stress test.

Since Halifax is located along the East Coast of Canada with it’s waterfront on the Atlantic Ocean, common risks can include flooding and hurricane damage. This means that getting home insurance in Halifax will be important to protecting what may be your biggest asset. Add-on coverages to consider include: sewer back-up coverage, windstorm coverage, and inland flooding protection. If you are getting a mortgage in Halifax or across Canada, you will require home insurance coverage as a condition in your mortgage contract. This is to protect the bank's collateral in the event of damage to the home or property.

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You will not be able to get a mortgage until the home construction is finished, however you may be able to get other funding to build a home. The two major costs of building a home in Halifax will be for purchasing the land and for building the home on the land. Most land purchases will require a large down payment, potentially up to 50% of the purchase price from traditional lenders. If this is the case, another option may be to fund the land purchase with a loan from a private mortgage lender. Although the loan will have a very high interest rate, you will likely be able to repay the loan by getting a mortgage after construction is completed. The cost of land will depend on where the land is, if it is cleared out already, and the size of the plot.

For building the home on the land, you will likely be able to fund the building costs with a construction loan, which will be paid off at completion when you get a mortgage on the finished property. Construction costs in Nova Scotia average out to be ~$125 per square foot, meaning a 2000 Square Foot home would cost ~$250,000 to build. If you were building a custom home, it may cost more than double this amount.

When looking for a home in Halifax, the two main ways to find home listings will be through online websites, and through the help of a Halifax real estate agent.

Real estate agents: Your agent will provide you with listings that meet your search criteria, in order to help you find a property that is in your price range and meets your needs and wants.

Websites: The most common website will be the Halifax MLS, where you will be able to search for new listings of rentals and homes for sale. This will include listings from real estate agents, and some properties listed directly by their owners.

The CMHC believes that sales and price growth in the Halifax housing market will remain steady over the rest of 2021, while moderating in 2022. Past 2022, the future outlook for housing sales and home prices remain less optimistic, with the potential for higher mortgage rates in Canada and a moderation in inter-provincial migration patterns.

With low inventories, a tight rental market, and a recovery in international demand, it's likely we see much higher housing starts in Halifax. This is good news for those looking to break into the housing market in the city. In the future, even with more supply of rentals being built, it's likely that rental rates and vacancies will continue to grind lower, with more international students and an increase in overall international migration to the region.

According to the Nova Scotia Association of Realtors, the average home price in the Halifax- Dartmouth area is $468,790. This is a 28% increase year-over-year from ~$366,000 in June 2020. Halifax home prices continue to benefit from record low inventory levels, and from migration to the city from other provinces and internationally. This has left Halifax with the highest housing prices in all of Atlantic Canada:

Overall, Halifax homes are still very affordable, even with the city having one of the lowest median household incomes among major Canadian cities, at ~$59,000. This makes the average home price in Halifax ~7.9 times the median household income. This compares favourably to the Toronto housing market at ~14 times, while the Montreal housing market is slightly more affordable at ~7.5 times. As well, the average home price in Halifax would require a minimum down payment of ~$23,440, much lower than $217,900 for the average home price in Toronto, and $26,464 for the average home price in Montreal.

Halifax has a fairly affordable cost of living, especially when compared to other major cities. The average cost of living for a family of 3 with a young child in preschool is ~$3900 per month. The largest expense you will have will be for housing, which will include the cost of rent and utilities, with an average total cost of $1805 for a 3 bedroom apartment. Other expenses include $909 for food, $325 for the cost of gas, maintenance, and insurance on a car, and $861 for preschool costs. This compares favourably to the same expenses costing $6041 in Toronto and $4213 in Calgary.

With a population of 448,544 people in 2020, Halifax is the largest city in Nova Scotia and the Atlantic Canada region. Halifax has continued to see strong population growth, with a population that increased 2.1% in 2020, with over 8000 new residents who arrived to the city through migration. Migration to Halifax was led by 5751 new people moving from other countries, 1584 people moving from other provinces, and 876 moving from other areas of Nova Scotia. As more Canadians continue to look for an affordable city to live in, and as immigration to Canada picks up in a post-COVID-19 world, Halifax is likely to continue to grow.

The city of Halifax is home to multiple post secondary schools, including:

• Dalhousie University
• Mount Saint Vincent University
• Saint Mary’s University
• University of King’s College
• The Atlantic School of Theology
• Nova Scotia Community College

With many post secondary schools, there is a large student population living and renting within Halifax, which may be something to consider if you are looking to purchase a rental property, or looking to live near the schools.

The Halifax property tax rate fell in 2020 to 1.038%, from 1.2055% in 2019. This gives Halifax one of the lowest property tax rates in Atlantic Canada, however it is made up for by the city having the highest home prices in Atlantic Canada. Similar to other cities across Canada, your mortgage lender may require you to pay your property taxes through them in Halifax along with your monthly mortgage payments.