Mortgage Talk

Content provided by

Agricultural Mortgages

While agricultural mortgagerates are similar to consumer mortgages, they are much more flexible when it comes to payment options, tenure period, and the transferability of debt. If you own a farm, or are currently considering getting into the agricultural sector, now's a great time to contact Family Lending and learn more about agricultural mortgages.

Big benefits of agricultural mortgages

When shopping for an agricultural mortgage, or when looking into an agricultural mortgage refinance, make sure you work with a mortgage broker first in order to understand the important differences between consumer and rural mortgage rates. Taking a residential mortgage on a rural property is a foolish first time buyer mistake, and one that could cost you thousands of dollars in additional interest payments.

The biggest difference between a consumer mortgage and a mortgage for agricultural landlies in the specific options offered by agricultural mortgage lenders. These include lower interest rates, flexible repayment options (including interest only payments), periodic payment choice, and the ability to transfer the mortgage to another person (specifically from one family member to another).

What does an agricultural land mortgage cover?

A rural mortgage is very flexible in that the money can be used for a wide variety of farm-related development. An agricultural mortgage not only offers capital for agricultural land, bit it also covers other types of mortgages to help purchase or develop rural properties, including pastures, gardens, nurseries, and ranches. You don't have to be looking to purchase a traditional "farm" in order to take advantage of lower rural mortgage rates, so keep that in mind when talking to your agricultural mortgage lender.

Agricultural mortgage rates

Prevailing market conditions and market rates, mortgage type, principal amount, and the equity value on the mortgaged property all play a part in the rates that agricultural mortgage lendersoffer. Agricultural land mortgage rates fall under two basic categories: fixed agricultural rates and variable agricultural rates. For more information on consumer fixed and variable mortgage please review our Fixed Mortgage Versus Variable Mortgage resource.

Like consumer fixed mortgages, a rural fixed mortgage features stable interest rates. This type of agricultural mortgage can sometimes be a bit high, but it will never vary through the mortgage tenure. A variable agricultural mortgage alters from month to month depending on market conditions. This means that your monthly payment amount will always be different, which can cause additional strain to an already tight budget. On the flip side, variable mortgages rates can often dip much lower than a fixed rate.

Investigate an agricultural mortgage refinance

If you're currently paying an extremely high fixed rate on your agricultural mortgage, you may want to consider opting to refinance your in order to secure a better rate. The trick is to find a variable mortgage rate when the prevailing market mortgage rate is low, and then refinance the mortgage to a fixed rate whenever the market rate gets too high. If the fixed rate becomes higher than the market mortgage rate, then you may wish to refinance the mortgage back to a variable agricultural mortgage rate or lower fixed agricultural rate.

Let the professional mortgage brokers at Family Lending help you find a competitive agricultural mortgage rate. Contact a broker by calling toll-free 1-866-941-6678.

Latest Mortgage News

Taking a Closer Look at CMHC's 2011 Annual Report

May 16 2012

The Canada Mortgage and Housing Corporation marked its 65th anniversary last week with the release of their 2011 annual report. As the nation’s top mortgage insurer (the organization backs $567 billion in default mortgage insurance), the CMHC controls roughly three-quarters of the nation’s mortgage default insurance. Despite inching ever closer to the $600 billion dollar government-imposed limit, the CMHC’s reported that there’s still plenty of room to meet the nation’s core demand for mortgage insurance.

High Home Prices and Bidding Wars: What You Need to Know

May 10 2012

The price of a new home in Canada is on the rise, according to data released by Statistics Canada today. Market information from March shows that the price of a new home in Canada rose by 0.3% from the previous month, marking the 12 consecutive monthly increase. While relatively minimal, the jump was slightly greater than the 0.2% advance predicted by market experts.

Does Your Down Payment Stack Up?

May 07 2012

Think that a 5 percent down payment is enough to secure a great mortgage rate? Think again. Pulling together the minimum 5 percent down payment, while a good start, is just that – a start. If you’re a first time home buyer looking to move up the property ladder, don’t skimp on your down payment. If you’re having trouble pulling together the 5 percent minimum, you’re setting yourself up for a hard, long haul.