A mortgage is a long-term credit commitment to finance the purchase of your home, which is used as security or collateral on that loan.  In fact, it is probably the largest personal financial transaction you will make in your lifetime.  The life of a mortgage (called amortization) can range from a few months up to 25 years.  You can usually borrow up to 80% of the appraised value of the house, or more than 80% if insured through Canada Mortgage and Housing Corporation (CMHC).  Repayment of the mortgage is usually made in regular monthly installments for the life of the mortgage - however you can choose weekly, bi-weekly, or semi-monthly payments as well.

What makes CMHC mortgages so popular is that they offer a down payment of only 5% - compared to a conventional mortgage that requires 20%.  And for many people, saving a down payment of 20% or more just isn't a manageable task - so CHMC mortgages become an attractive option.  CMHC (Canada Mortgage and Housing Corporation) mortgages allow the purchaser to borrow up to 95% of the purchase price or appraised value (whichever is less) of a residential property.  Unfortunately this benefit doesn't come without a cost - mortgage insurance is required on these high ratio mortgages.  The cost of this insurance varies depending upon the amount financed and the percentage of the down payment. This premium is typically added to the loan amount - and amortized throughout the lifetime of the mortgage but it can also be paid upfront in a single lump sum.  Many first time home buyers choose the option of a lower down payment, adding the cost of the insurance to the loan, and a longer amortization (up to 25 years) to keep their payments manageable.  CMHC mortgages allow many people to realize their dreams of homeownership sooner than any other type of mortgage.

A conventional mortgage, also known as a traditional mortgage, is a mortgage where the loan amount generally does not exceed 80% of the property's purchase price or appraised value (whichever is less).  The balance is usually made up by a cash down payment.

There are other mortgages, such as a CMHC mortgage, where your down payment is substantially less - and in the case of a CMHC mortgage only 5%.  A CMHC mortgage is able to offer a lower down payment because it requires the purchase of mortgage insurance to insure against payment default.  Since you are borrowing less money with a conventional mortgage, and aren't required to purchase mortgage insurance, you will save a significant amount of money in interest and insurance costs over the life of your mortgage.

As a general rule of thumb: if you have the ability to put a down payment of 20% or more - a conventional mortgage is likely in your best interests.  If not, we encourage you to explore our CMHC mortgage option.  Not sure? Visit one of our Mortgage Specialists to discuss your options and develop a mortgage solution to fit you and your financial goals.

Transferring your mortgage to Weyburn Credit Union is not only simple and easy to do, it’s affordable and it makes a lot of sense. We'll contact the financial institution currently holding your mortgage and make all the arrangements for you.

At WCU, you have your choice of mortgages and options. We offer:

• Open - gives the borrower the option to repay any amount of the mortgage, in part or in full, at any time without penalty.  Interest rates are typically higher on open mortgages.  We offer a 1 year open mortgage at a fixed rate
• Fixed - gives the borrower peace of mind because their mortgage payment and interest rate are guaranteed - they will not fluctuate for the term chosen.  It allows the borrower to repay portions of the mortgage amount through extra payments called "prepayment privileges" - without an interest penalty.  If a fixed mortgage is paid out in full prior to the maturity date of its term, an interest penalty is usually applied.  We offer a 1 year open mortgages at a fixed rate - or closed mortgages with terms from 1 to 5 years.
• Closed - Closed typically does not allow extra payments or early repayment without incurring penalties - but not at WCU - we allow you to repay up to 20% of the original borrowed amount of your mortgage each calendar year!  Interest rates are typically lower on closed mortgages.
• Variable - means the interest rate on your mortgage is not locked in - it will fluctuate as market interest rates fluctuate.  It offers the potential for significant savings of interest costs if interests rates decline - conversely, if interest rates rise so will the interest rate and payment on your mortgage. We offer a 5 year closed mortgage with a variable rate.  
• Terms from 1 to 5 years.  At the end your chosen term, you can renew your mortgage at prevailing interest rates or pay it out in full.  
• Amortization periods of up to 25 years - amortization refers to the lifetime of the mortgage.  It is the number of years over which the repayment of your mortgage is calculated.
• Convenient and flexible repayment options - you can set up your payments to fit your income streams and preferences: weekly, bi-weekly, semi-monthly or monthly.

Got questions? We are happy to walk you through your financing options and build a mortgage solution to suit you, your repayment preferences and your homeownership dreams!