Mortgages | BCU Financial – Buduchnist Credit Union

First Time Home Buyer

Are you ready to buy your first home but are overwhelmed by the jargon of credit scores, down payments and different types of mortgages? BCU Financial will help you navigate the home-buying process and find the right mortgage with the best possible rates and terms for your particular lifestyle.

The Canadian government’s Home Buyers’ Plan will allow you to use up to $25,000 per person of your RRSP savings towards the down payment of your first home. For more information, contact your local Financial Services Officer.

Mortgage Types

  • Fixed Rate Mortgage
  • In a fixed rate mortgage, the interest rate is locked-in for the selected mortgage term. That means if interest rates go up or down, your monthly mortgage payment will remain unchanged and your principal and interest payments will stay the same for the duration of your mortgage term. After your mortgage term has expired you will have to renew or refinance your mortgage loan with a new term and interest rate or pay off your principal in full.

  • Variable Rate Mortgage
  • In a variable-rate mortgage, the interest rate can go up or down depending on the BCU Financial Prime Rate, which closely follows the interest rate set by the Bank of Canada. BCU Financial adjusts the interest on variable mortgages every three months to reflect any change in the Prime Rate. If the interest rate changes during that 3 month period, then your monthly payments will change. If interest rates go up, then your monthly payments will increase. If interest rates go down, then your monthly payments will decrease. After your mortgage term has ended, you will need to renew your mortgage loan with a new term and interest rate or pay off your principal in full.

  • Closed Mortgage
  • A closed mortgage restricts the amount of the principal you are allowed to prepay during you mortgage term. BCU Financial allows you to prepay to a maximum of 20% of your original principal amount per calendar year without paying a penalty. You could also increase the amount of your payments by as much as 20% one time in each calendar year

  • Open Mortgage
  • An open mortgage is a mortgage that allows you to repay the principal amount at any time without paying a penalty. You can make lump sum prepayments or accelerated payments without penalty in order to pay off your mortgage before the end of the amortization period. Open mortgages are more flexible, but they have slightly higher interest rates than closed mortgages.

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