If you take any type of loan, you are expected to pay it back at a specified interest rate, over a period of time. Interest rates may vary, depending on the nature and duration of the loan that you have taken.
If you have taken a student loan, it is time to start repaying your loan once you have graduated, have left school or are planning to take time off for over 6 months. Most financial institutions in Canada offer student loans, where the repayment is expected after 6 months of graduating or leaving school. While you won’t need to make a loan payment during this initial 6-month period, an interest will still be charged. Student loan interest rates may vary, depending on whether you choose between a variable interest rate and a fixed interest rate. Your interest rate may vary in a floating interest rate loan, but will remain unchanged, if you choose a fixed interest rate loan. It is your responsibility to set up a repayment schedule with your loan provider, after the 6-month non-repayment period. Student loan interest rates currently stand at 5% for fixed interest rates and 2.5% for floating interest rates. It is also a good idea to check with your lender about how they will calculate interest and the various methods of repayment that will not burden you financially.
The Bank of Canada reports all interest rates in Canada. Numerous factors influence the way Canadian interest rates are calculated. Sometimes, banks offer better interest rates, known as prime interest rates to their most credit-worthy customers, mostly consisting of large corporations. The prime interest rate is determined by the federal funds rate, which is a rate that banks lend to each other. In Canada, the prime interest rate stands at 3%.
Many banks and financial institutions in Canada also offer home loans and mortgages. A home interest rate may vary, depending on the terms and conditions. A home loan caters to the specific needs of an individual. Fixed mortgage rates are popular with a majority of homebuyers, as it protest you against interest rate fluctuations and other external factors, so your repayment remains constant throughout the duration of your home loan term. At present, a fixed 5-year mortgage rate from one of the big Canadian banks is a little above 3 percent, with variable mortgage rates ranging just below it. If you are looking to calculate your home loan and interest rates, you can refer to a Canadian mortgage calculator.
When a reference is made to Canadian interest rates, most commonly it refers to bank interest rates. This rate influences lending rates among banks. The benchmark bank interest rate in Canada has been recorded at 1 percent.
If you are looking to understand more about interest rates in Canada or need any more information, you should log on to www.mymortgagebroker.com and choose from the multiple choices that are available. If you need any further help with the process or have any additional questions, you can contact their customer service representatives between Monday and Friday at 403-870-2669.