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Rates are based on a home value of $400,000
Rates are based on a home value of $400,000
Rates are based on a home value of $400,000
Updated
Headquartered in Montreal, Quebec, the National Bank of Canada (also known as NBC) is the sixth largest bank in Canada, servicing over 2.4 million customers across the nation. In Quebec itself, it’s the second largest financial establishment, after Desjardins. As a bank, it is the largest in Quebec, as over 60% of its business is in the province, with most of its 21,000 employees being located there as well.
National Bank manages over $350 million in assets, having significantly expanded its wealth management and financial market services in the last few years. However, the bulk of its earnings still comes from its personal and commercial banking division.
The National Bank of Canada as we know it today came into existence in 1979 in the wake of a merger between the Banque Canadienne Nationale and The Provincial Bank of Canada. Banque Canadienne Nationale, which was founded in 1859 as Banque Nationale, was itself a product of a merger, which occurred in 1924 between the Banque Nationale and Banque d’Hochelaga. The merged entities settled on the name ‘Banque Canadienne Nationale’ in 1925. The Provincial Bank of Canada, founded in 1861, was also a product of multiple mergers – with the People’s Bank in 1970 and Unity Bank of Canada in 1979.
Following the merger, the National Bank acquired a mortgage firm known as Lévesque Beaubien, then Mercantile Bank of Canada, and finally, Levesque Beaubien Geoffrion Inc., one of the most influential brokerage houses in the country. All of these major acquisitions occurred during the 1980s. The National Bank has acquired more businesses since then and continues to expand through acquisitions to this day.
Like many other financial institutions, the National Bank offers a multitude of mortgage options to home buyers, including:
Fixed-rate mortgages are good for people who want stability and peace of mind. These mortgages guarantee that no matter what happens to the prime rate, your mortgage rate will remain the same, making it easier to plan how you will pay out your mortgage in the future.
At the National Bank, you can get a closed fixed-rate mortgage with terms as short as three months and as long as ten years. In fact, the National Bank offers the shortest closed terms out of all the major banks in Canada. That said, the five-year term is still the most popular one, as it allows you to make consistent payments for a period that is neither too long nor too short.
National Bank’s open fixed-rate mortgage terms can be as short as six months and as long as one year. This option is less desirable, as it comes with very high interest rates. However, if you want to pay off your mortgage faster than usual via lump-sum payments, you can go down this road.
Unlike fixed-rate mortgages, variable-rate mortgages fluctuate with the prime rate, making them somewhat unstable. Even so, it’s a great option if you’re certain that interest rates will go down during your mortgage term, because your mortgage rate is likely to follow suit.
On the other hand, rates can also go up – by a significant amount. For instance, between March 2022 and June 2023, the national prime rate went from as low as 2.45% to as high as 6.95%, and the National Bank’s variable rates followed.
National Bank offers its variable-rate mortgages in a single 60-month (five-year) closed term. You can opt for either a regular variable-rate term, with a lower mortgage rate that will fluctuate along with the prime rate, or a capped-rate term, with a higher mortgage rate that's capped by a maximum rate, set before you take the mortgage.
Unlike many other financial institutions, the National Bank does not offer open variable-rate mortgages, which usually come on shorter terms that last either two years or one year.
Home equity line of credit, or HELOC, is a type of mortgage product that lets you access the equity you have in your home. Equity is the difference between the value of your home and what you owe on your mortgage. For instance, if the value of your home is $700,000 and you owe $400,000, then your equity is $300,000. Equity grows as you pay off your mortgage and as your home’s value increases over time.
In Canada, you can utilize up to 65% of your home value once you accumulate at least 20% equity – either via a down payment or a combination of both your down payment and regular mortgage payments.
National Bank offers an ‘All-In-One' HELOC, which lets you borrow money against your mortgage in one big sum right away – to pay for renovations, for example – or in incremental amounts, similarly to how you’d borrow money via your credit card.
Your credit limit will be decided by you and your lender. However, it cannot be higher than 65% of your equity. Given that such a credit limit can still be very high, be careful when deciding whether HELOC is right for you. If you have bad spending habits, for instance, you can easily accumulate more debt than you can pay off, which can cost you your home.
If you run a small business, or you’re a freelancer – meaning you earn your money by being self-employed – you may have trouble securing a good mortgage deal. That’s because your income isn’t seen as stable or a ‘guarantee’ – at least not in the same way as the income of a full-time employee.
National Bank’s mortgage for the self-employed exists specifically to help self-employed Canadians get a good mortgage deal. However, you do need to meet certain eligibility criteria, such as having no more than two dwellings, the value of which does not exceed $1,000,000, and being self-employed for at least two years, with two years' worth of solid financial and credit management.
In addition to various mortgage products, National Bank offers several features that can further enhance your home-buying experience. Here’s what they are:
With National Bank’s mortgage protection insurance, you can purchase insurance to cover your mortgage payments in case you are either disabled or killed. You can buy mortgage life insurance, critical illness insurance or disability insurance, with some coverages paying up to $1,000,000 for your mortgage, should you become incapacitated. To be eligible, you need to be from 18 to 64 years of age and live either in Canada or the US. By purchasing this insurance, you can ensure that you or your loved ones don’t lose the property should something happen to you.
If you’re looking for ways to pay off your mortgage quicker, you can do so using the following features:
With the National Bank, you get to pay your property taxes at the same time as your monthly mortgage, simplifying the overall process. That said, paying your property taxes through your mortgage isn’t the only option.
For example, instead of going this route, you can put your tax money for the year in question on a separate account and let it sit there, earning you interest. You can also pay taxes monthly yourself, if you so desire, instead of going through your mortgage. There is no benefit to this, other than you get to be the one in control of the payments.
National Bank’s advertised special offer 5-year variable, 5-year fixed and HELOC rates
| Date | 5-yr variable | Date | 5-yr fixed | Date | HELOC |
|---|---|---|---|---|---|
| Jun 9 2023 | 6.75% | Jun 30 2023 | 5.74% | Jun 23 2023 | 7.95% |
| Jan 27 2023 | 6.50% | May 15 2023 | 5.54% | Jun 9 2023 | 6.95% |
| Dec 9 2022 | 6.25% | Dec 2 2022 | 5.69% | Jan 27 2023 | 6.70% |
| Oct 28 2022 | 5.75% | Oct 28 2022 | 5.59% | Dec 9 2022 | 6.45% |
| Oct 21 2022 | 5.25% | Oct 21 2022 | 5.54% | Oct 28 2022 | 5.95% |
| Sep 16 2022 | 5.15% | Jul 29 2022 | 5.39% | Jul 15 2022 | 5.70% |
| Sep 9 2022 | 5.10% | Jul 15 2022 | 5.34% | Jul 8 2022 | 4.70% |
| Jul 29 2022 | 4.35% | Jul 1 2022 | 5.24% | ||
| Jul 15 2022 | 4.25% | ||||
| Jul 1 2022 | 3.25% |
Both five-year fixed and five-year variable rates saw a significant increase over the course of 2022 and 2023. As expected, the variable rates were impacted much more severely than the fixed ones, going from 3.25% in July 2022 to 6.75% in June 2023. Fixed rates went from 5.24% in July 2022 to 5.74% in October 2022. Fixed rates tend to be more stable – and significantly higher than the prime rate to ensure there is wiggle room for the ups and downs in the economy. HELOC rates, however, saw a pattern similar to that of the variable rates, going from 4.70% in July 2022 to 7.95% in June 2023.
The reason for such drastic increases across the board is the Bank of Canada’s continual battle with inflation. It began increasing its overnight rate in early 2022 and kept on doing so throughout 2022 and first half of 2023 (in 0.25% or 0.50% increments). The national prime rate mirrored this increase, going from 2.45% in January 2022 to 6.95% by June 2023. Given that variable and HELOC rates tend to follow the prime rate, their drastic increase at the National Bank is not surprising.
As of June 2023, there is no consensus on whether the rates will go up again or remain the same. Some experts say that the prime rate will go up 0.25% (or 25 basis points) again (following a similar increase of the overnight rate), though it’s not 100% guaranteed. It’s best to prepare for the worst, given the circumstances.
If you’re looking to apply for mortgage at the National Bank of Canada, you can select from the following options:
National Bank of Canada is an A lender.
What separates A lenders from B lenders is government regulation. A lenders are all regulated – either on the federal level (if they are a chartered bank) or provincial level (if they are a credit union). Furthermore, A lenders usually cater to customers with good credit scores and reliable income streams – the so-called ‘prime borrowers.’ B lenders, however, are not regulated – though they do have to follow certain regulations (in other words, they are not ‘illegal,’ but they are less strict). They also tend to lend money to people with subpar credit scores and uneven or low income streams.
As a chartered bank, the National Bank is government-regulated – one of the Big Six, in fact – which is what qualifies it as an A lender. In addition, you need a decent credit score and steady income to qualify for its loans.
You can find rates for the National Bank of Canada and other Canadian banks online. You can then gather them all in a spreadsheet and compare them side by side.
Your second option is to get in touch with a mortgage broker, with whom you can work to secure the lowest mortgage rate available.
The easiest option by far, however, is to use a comparison site like RATESDOTCA to look up available rates in a matter of seconds (and for free).
Since rates tend to fluctuate wildly, there is no way to answer this definitively. However, if you’d like to see how the National Bank’s rates compare to those of other financial institutions, consider using a comparison site like RATESDOTCA. In just a couple of clicks, you can identify the best available mortgage rate from 50+ lenders across Canada, including the National Bank.
Taras is a content manager at RATESDOTCA, specializing in home insurance. He has worked at the company for a year and has since collaborated with multiple experts to fully familiarize himself with the intricacies of the insurance industry.
He has over nine years of content marketing experience across multiple industries in B2B and B2C spaces. He has produced thought leadership content for organizations like Constellation Software, Facebook and Yellow Pages as well as outlets like Huffington Post and MSN Canada.
He has graduated from York University with a Bachelor of Arts degree in Film Studies and has also studied Technical Communication at Seneca College – the co-op program that introduced him to the world of content marketing.
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