Buying a house is the largest purchase most people will ever make. St. Mary’s (Toronto) Credit Union has the tools and products to assist you with your choice of mortgages. Choose the payment frequency that suits you best: weekly, biweekly or monthly.

Mortgage Basics

For a conventional mortgage, you will require 25% down payment of your home's purchase price. Some options for a down payment include:

• Cash on deposit
• Using your RRSPs. The Canadian Government allows $20,000 to be cashed in per person and receive 100% of the value of the RRSP to be put towards the purchase of a home. See their website at www.cra.gc.ca for more information.

CMHC / Insured mortgages

If you do not have the required 25% down payment to purchase your home, you may qualify with as little as 5% through Canada Mortgage and Housing Corporation's Insurance. This is considered a high ratio mortgage and there are insurance fees associated with this type of mortgage.

Mortgage Life Insurance

St. Mary’s (Toronto) Credit Union offers mortgage life insurance to protect your loan obligations in case of the unexpected. For more information, please see your loans officer.

Variable Rate Mortgage

The variable rate mortgage is a three-year term open mortgage with the rate being set to prime. Your payments are set in advance, but the interest rate may change depending on market conditions. The interest rate is reviewed quarterly, and adjusted if necessary. Your payments may remain the same, but the portion that goes towards your principle may change. Because this is an open mortgage, you can pay it off at any time or convert it into a fixed term mortgage without penalty.

Open Mortgage

An open mortgage allows you to pay off some or all of the mortgage without any interest penalty. Open mortgage terms are 6 months or 1 year and have rates slightly higher than closed mortgages. You can convert an open mortgage to a closed fixed term mortgage. The benefits of an open mortgage are in situations where you may be paying down a substantial portion of your mortgage in the near future or you may be selling your home and buying another.

Closed Mortgage

A closed mortgage allows you to lock in your interest rate for a longer term. Terms for closed mortgages range from 1 to 5 years. Rates are lower on a closed mortgage than an open mortgage since you have different prepayment privileges. These prepayment privileges are:

• Making lump-sum payments. Once every 12 months, you can pay up to 15% of the original amount of your mortgage that will be applied directly to your principle.
• Increasing the amount of your payments. Once in each 12 month period you can increase your monthly payment by as much as 15% without fees or penalties.