What You Need to Know About Getting a Mortgage in Manitoba

With relatively few rental vacancies in Manitoba (2.4% according to the 2011 National Household Survey) and record low interest rates, it’s no surprise that more and more folks are choosing to purchase their own home by getting a mortgage in Manitoba. Roughly 70% of Manitoban households own the roof over their head with the remaining 30% choosing to rent.

While many national housing experts continue to talk about a housing slowdown, the Keystone Province has seen average prices for detached bungalows increase 1.8% in 2015, to $316,732. The market for condos did see a bit of a plateau and fell year-over-year by 1.5%, to an average of $205,969 according to the Royal LePage House Price Survey and Market Survey Forecast.

While current housing prices might appear expensive to notoriously frugal prairie dwellers, Manitoba continues to be a relatively affordable place to buy a house when compared to the average national detached bungalow price of $438,938 (up 7.5% year-over-year).

Here’s what you should know about getting a mortgage in Manitoba:

The basics of a mortgage in Manitoba

If you want to enter the ranks of proud homeowners, start by collecting the following documents:

• Your CRA Notice of Assessment from the past few years
• Three or four of your most recent pay stubs
• Your most recent T4 (aka Statement of Income)
• A general list of your current assets and liabilities
• A letter from your employer that confirms your time at your current place of work
• Your SIN card

Ideally, you should start the mortgage process far in advance of actually purchasing the house of your dreams. This is to allow time for all of the paperwork to make its way to the various stakeholders that need to verify your ability to repay the mortgage. This early start is often referred to as a pre-approval and is recommended by every financial institution I’ve ever worked with.

New down payment rules

Effective around the middle of this month, the Government of Canada is introducing new mortgage rules. These regulations were primarily put in place to cool the thriving housing markets in Toronto and Vancouver, but will also affect some Manitoba buyers. Here’s a quick summary:

Homes that sell for less than $500,000 currently require a minimum down payment of 5% of the home’s purchase price – this won’t change.
Homes that sell for between $500,000 and $1,000,000 will require an additional 10% of the amount of the purchase price that is over $500,000.

Manitoba’s land transfer tax

Unlike our prairie neighbors in Saskatchewan and Alberta, Manitoban homebuyers do get hit with a land transfer tax when they purchase a house. The following breakdown can be used to calculate what you will owe the provincial government if you get a mortgage in Manitoba:

• Automatic $70 registration fee
• 0.5% on the first $30,000
• 1.0% on the next $60,000
• 1.5% on the next $60,000
• 2% on anything above that

Manitoban advantage

One unique feature about the Manitoban financial services market is the prevalence of credit unions. I’m not sure if it’s the province’s rural agricultural roots, or if they just know something most Canadians don’t, but with credit unions making up roughly 40% of the market, Manitobans are presented with consumer choices the rest of the country can only dream of. Three of the largest 10 credit unions in Canada are based in Manitoba and several of the largest online credit unions as well.

If you’re in the market for a mortgage in Manitoba, look online to compare mortgage quotes from multiple lenders to get the best deal for you.