Nesto Mortgage Rates 2024

While many lenders offer posted and discounted (or special) rates, nesto only advertises its lowest rates.

Fixed-Rate Mortgages

Variable-Rate Mortgages

Nesto may be able to help newcomers to Canada secure a mortgage with a 5% down payment under a specialized New to Canada Program. Borrowers must be able to prove they have temporary or permanent residency in Canada with permanent income and employment. You are considered a newcomer if you immigrated to Canada within the last five years and have obtained permanent residency status or confirmation of permanent residency status from Immigration, Refugees and Citizenship Canada.

Nesto currently offers 1% cash back on eligible transactions, up to $13,754 on your mortgage value. For example, with a $500,000 mortgage, you’ll earn $5,000 cash back. This applies for both new mortgages and renewals, and is only for five-year terms with 120-day rate holds. The total loan amount must be between $125,000 and $925,000. The mortgage rate for the cashback mortgage is different from advertised rates.

If the mortgage is discharged, transferred or refinanced before the date of maturity of the term, all or a portion of the cash back must be repaid. The cash back can not be used towards the down payment of the mortgage, or be used to pay off debt before the mortgage is funded.

Nesto also offers a Low Rate Guarantee: If you find a better rate, nesto will match it, beat it or give you $500. Here’s how it works:

1. Submit your nesto mortgage application online or on the phone.
2. Secure a rate with nesto.
3. Within five calendar days search for a better rate for an equivalent mortgage (with similar prepayment options, penalties, etc.) from one of nesto’s listed “Top Banks,” namely, BMO, Scotiabank, CIBC, Desjardins, Laurentian, National Bank, RBC and TD.
4. If you find a better rate, submit the formal mortgage rate offer to nesto for review. If nesto can beat the offer, it will confirm the new offer in writing. If Nesto can not match or beat the offer, nesto will give you $500 at the funding of the mortgage with the other lender.

Rates are an important factor in securing a mortgage, but other considerations should be made to ensure that your loan meets your long-term needs.

Posted Rates Vs. Special Rates

The posted rate is the rate that a lender openly advertises and is generally considered the starting rate for a mortgage rate negotiation. It is typically the uppermost rate that a bank will give you.

Special rates, also known as discounted rates, are advertised discounts off posted rates.

Nesto only advertises its lowest rates which are typically over 2% lower than the posted rates by the Big Banks.

Fixed Vs. Variable Mortgage Rate

With a fixed-rate mortgage, you make the same payment over the entire term. Your mortgage rate and payment are not affected by changes to the Bank of Canada’s (BoC) overnight rate.

However, if you have a variable-rate mortgage, your mortgage payments change in sync with the overnight rate; as rates go up, your mortgage payment rises as well. Conversely, when the prime rate drops, so will your variable-rate mortgage.

Assuming a $300,000 insured mortgage with a 25-year amortization, here’s how the payments compare using current nesto mortgage posted rates:

Related: Should I Choose a Fixed-Rate Or Variable-Rate Mortgage?

Shorter Vs. Longer Mortgage Term Lengths

Your mortgage term is the amount of time you are contractually obligated to pay your mortgage at a stipulated rate. With a five-year fixed-rate mortgage, for example, you’ll pay the same amount each payment at a given interest rate for five years. With a five-year variable-rate mortgage, your rate will vary in sync with the prime rate in relation to the rate you are offered when you start your mortgage for five years.

A long-term mortgage is typically one with a term longer than three years. Nesto advertises the following long-term mortgages:

• 4-year fixed-rate
• 5-year fixed-rate
• 5-year fixed-rate (150 days locked rate)
• 5-year cashback rate
• 5-year variable
• 5-year variable (150 days locked rate)
• 5-year cashback rate
• 7-year fixed-rate
• 10-year fixed-rate

A short-term mortgage has a term of three years or less. Nesto offers the following short-term mortgages:

• 2-year fixed-rate
• 3-year fixed-rate
• 3-year variable-rate

If you want the consistency of a fixed-rate mortgage but think rates may go down in the future, you can choose a shorter term with the hope that rates will be lower at renewal time. However, you might choose a longer-term mortgage if you prefer budgeting a set mortgage payment for a longer period.

Open Vs. Closed Mortgages

An open mortgage gives you more flexibility to pay off your mortgage or break your mortgage contract than a closed mortgage. For example, with an open mortgage, you can convert it to another term at any time without a prepayment penalty. However, an open mortgage typically has a higher interest rate in exchange for this flexibility.

An open fixed-rate mortgage may be a good option if you want flexible prepayment options, plan to sell your home in the near future, or would like the option of early renewal to a longer term without any costs.

Nesto does not advertise any open mortgages:

Convertible Mortgages

With a convertible mortgage, you can convert your mortgage from a shorter (typically six-month) closed term to a longer fixed-rate closed term of one year or more without prepayment penalties.

Nesto does not advertise any convertible mortgages.

Prime Rate

Nesto’s prime rate is currently 5.45%.

Rate Vs. APR

The posted interest rate is the rate that a lender advertises openly. The APR, or annual percentage rate, includes other borrowing costs, such as fees. Nesto only advertises its posted rate.

Nesto Mortgage Rate Lock

Once you are preapproved for your mortgage, nesto advertises offering a mortgage rate lock (otherwise known as a rate hold), which holds the rate on your preapproved term even if interest rates go up. This period is usually between 30 and 180 days and nesto offers a rate lock for up to 150 days.

Prepayment Privileges at Nesto

By taking advantage of nesto’s prepayment privileges, you can pay off your mortgage faster as prepayments go directly to your loan’s principal or the part you originally borrowed.

Here are your prepayment options at nesto:

• Lump sum payments: Make a one-off payment against your mortgage during your mortgage term (to your allotted 20% maximum) or at renewal.
• Accelerated payment schedule: Increase your payment frequently to an accelerated weekly or biweekly payment schedule and pay the equivalent of one extra mortgage payment each year.
• Increased payment amount: Increase your weekly, bi-weekly, or monthly payment by up to 20%.

Getting a pre-approval is an important step in the home-buying process because you’ll know how much home you can afford and at what interest rate.

Nesto outlines these steps for getting a pre-approval:

• Application: You’ll complete a mortgage preapproval application online or over the phone.
• Get advice: A nesto mortgage advisor will contact you to discuss your options and answer any questions.
• Verify and confirm: You’ll upload the required documentation to verify your identity and provide proof of your income, assets, debt and down payment.
• Underwriting: Nesto’s internal underwriting team will review your documents and determine whether or not you qualify for a mortgage.
• Pre-approval letter: If nesto determines that you qualify for a mortgage, it will send you a letter confirming the details of your preapproval and the terms and conditions, including the interest rate. You can use this letter when making an offer on a property.

Related: Five Things You Need To Be Preapproved For A Mortgage

What Types of Properties Does Nesto Finance?

• Single-family homes
• Residential properties with up to four units (one must be owner-occupied)

Nesto does not currently offer financing for:

• Mobile homes
• A home you build yourself or with a contractor
• Land purchases

Documents Required

To start your nesto mortgage application, you’ll typically need the following information and documents:

• Government identification, such as a passport or driver’s license
• Proof of income, usually a pay stub if you are employed, T4s or notices of assessment (two years’ worth) if you are self-employed
• Proof of a down payment or ability to cover closing costs
• Length of time with your employer
• Proof of any other assets
• Information about your other debts, particularly how much you owe and pay monthly on them

You must also be the age of majority in your province or territory.

You’ll need to provide additional documentation for your final mortgage approval, such as your purchase agreement, notice of fulfillment, appraisal and MLS listing.

To get the best mortgage rates, you want to prove to your lender that you can service your debt over the term of your mortgage. Borrowers with excellent credit histories and low debt-to-income ratios typically secure the best rates.

Long before you apply for a mortgage, it’s best to get your financial house in order. Consider the following:

• Consolidate your debt: Too much debt in relation to your income and assets is a red flag that you may not be able to make your mortgage payments, especially if interest rates change. Consolidating your debt into one lower payment can help you pay it down faster.
• Improve your credit score: Your credit score is a three-digit number that gives a lender a snapshot of your spending and payment history. The higher the score, the more likely you’ll be approved for your mortgage and with the best rate. Like the Big Six Banks, nesto has strict lending guidelines that require a good credit score (650 or above) and no recent missed payments. The lender stipulates it cannot help borrowers with a previous consumer proposal or bankruptcy.
•  Save more money for a down payment: In Canada, the minimum amount you need for a down payment depends on the house’s purchase price. For properties up to $500,000, the minimum down payment is 5%. For properties between $500,000 and $1.5 million, you’ll need 5% of the first $500,000 + 10% of the remaining amount. For properties above $1.5 million, you’ll need a minimum of 20% for a down payment. (Before December 15, 2024, the upper threshold was $1 million.) The larger your down payment, the less mortgage you’ll require, making it easier to qualify for a loan.
• Negotiate: Don’t be afraid to ask if the rate you are being offered is the best the bank can offer. However, unlike other lenders that may offer a high, middle and floor rate, nesto states it offers the best rate from the start. However, nesto also offers its Low Rate Guarantee, so if you are offered a better rate by one of Canada’s top banks (as listed by nesto), nesto will beat it, match it or give you $500.