(778) 668-9320 scott.dawson@verico.ca

If you live in British Columbia we’re lucky enough to have some of the lowest mortgage rates in the country. BC Credit Unions like Coast Capital, G&F, Prospera, Vancity, Westminster Savings and Envision are offering some excellent 5 year fixed rates.

Along with the great rates offered there’s always a catch. What the Credit Unions don’t disclose on their advertisements is the conditions you must meet in order to obtain their best rate or the terms and conditions of the mortgage once you do.

While the low advertised rate might sound great upfront, once you read the terms and conditions it might not sound like such a good deal.

  • Coastal Credit Union requires you to place your home insurance through Coastal Community Insurance Service, open an overdraft protection line of credit or prime line account and open or maintain a deposit account with them where the mortgage payments will be drawn from in order to get their “best” rate.
  • Envision Financial requires a full banking relationship and requires you to open or maintain a deposit account with them and one other banking service ie: RRSP, credit card or line of credit.
  • The Vancity Savers Mortgage makes it mandatory to setup a minimum $50 monthly savings in a non-registered account to qualify for their lowest rates. This is on top of a full banking relationship.
  • Prospera’s 5 Year MyStyle Mortgage allows no lump-sum prepayments and has a 12-month interest penalty for early termination.
  • The above was just a few of the additional terms and conditions required by Credit Unions when applying for their “best” rates.

    Credit Unions also have a more limited lending area than most other lenders. They typically will only finance properties that are within servicing distance of their branch network and depending on the Credit Union, this can be a small area.

    Credit Unions also offer an approved lawyer/Notary list. While the lists accommodate most areas in the Credit Unions servicing area your choice is limited and if the particular solicitor you want to use is not on their list you will have to choose another.

    This post was by no means made to discourage people from choosing a Credit Union for their mortgage. In fact I have sent many clients to the lenders above because it “fit” with their personal situation. Many clients also love working with their current financial institution and switching to another for a 5-10 basis point savings isn’t always worth it once you read the fine print.

    I just encourage you to look deeper than just the mortgage rate advertised, read the fine print and discuss all your options and more importantly ask your Mortgage Specialist any questions you may have.