Canadian Dollar Mortgage

Overview

The Canadian dollar is the currency of Canada (C$).  As of 2007, the Canadian dollar was the 7th most traded currency in the world. On world markets, the Canadian dollar historically tended to move in tandem with the U.S. dollar, however, during the rise of the Canadian dollar since 2002, it has gained value against the U.S. dollar as well as other international currencies. In recent years, dramatic fluctuations in the value of the Canadian dollar have tended to correlate with shifts in oil prices, reflecting the dollar's status as a petrocurrency owing to Canada's significant oil exports.

Mortgage

A Canadian Dollar denominated mortgage can be arranged when the property is located in a country whose currency is the Canadian Dollar or when the borrower earns in Canadian Dollars.

The current Canadian Base Rate is 0.50%. Thereafter a variable margin, typical 1 - 2% is added to such rate to give the paying mortgage rate. Such margins may vary with the country where the property is located, its loan to value and the location of the lender.

Rates can be variable, tracker or fixed and the maximum ratio of loan to value is 80%. Conditions may apply.

The granting of such mortgage may however be limited to a minimum amount, typically 160,000 C$

Capital and Interest Only mortgages are available with a Canadian Dollar denominated mortgage. In some cases an all Interest Only mortgage may be 0.2% higher than a Capital Repayment equivalent. 

Switching

IMPORTANT:

In AUSTRALIA, CANADA, DUBAI, FRANCE, HONG KONG, NEW ZEALAND, PORTUGAL, SINGAPORE, SPAIN, UNITED KINGDOM (also) and UNITED STATES, The Mortgage Explorer Ltd can offer a switching  facility where a dual currency loan is granted. There are 2 free currency switches, offered per calendar year and a fee of USD150 per switch applies thereafter.

We consider such facility to be of utmost importance especially at times of great uncertainty in the currency markets. Also when/if a reduction in loan amount has been achieved through the change in exchange rate between  two currencies e.g. the currency where the property is located and the Canadian Dollar. 

Please note:

Foreign exchange movements can be sudden and substantial and you must be able to tolerate a sizeable increase in your loan through such movements. At no stage should you expose yourself to high risks of foreign currency borrowings if you are not able to afford the potential losses that could result from adverse currency movements and the higher interest rate servicing costs that would be required of you due to your having a larger loan. Denominating debt in foreign currencies may not be suitable for you. If you have any doubts as to your suitability for borrowing in foreign currencies or your understanding of the risk involved, you should consult your financial adviser. Changes in the exchange rate may increase the equivalent of your debt, in whatever currency you deem important to you e.g. main income's. Your lender will not tolerate too great an increase in your loan as a result of currency losses and may opt to convert the loan back into the lender's specified base currency at a predetermined level. This may result in a permanent increase in your loan which is not fully compensated for by any other benefits. In this event, you could be left paying interest rates on a larger amount of loan than that you originally borrowed.