In the past, MonsterMortgage.ca has written about these kinds of super low rate mortgage products, and typically they come with certain caveats only revealed in the fine print, however; this product certainly seems to fare better than past ‘special’ low rate mortgages.
The Meridian Credit Union, the largest credit union in Ontario, has made headlines by releasing an 18-month fixed mortgage at 1.99%. While the unique mortgage term presents some challenges compared to the ‘regular’ five-year fixed products in the market, the rock bottom rate is sure to stimulate eyeballs in today’s market.
For this 1.99% product, Meridian offers purchasers the option to register their mortgage with a standard charge or with a collateral charge should they choose to have it. MonsterMortgage.ca has also discussed the value of portability in the past, useful for homeowners who might opt to upsize before their term is up – allowing them to take their current mortgage to the next property.
Pre-payment privileges are also fully-fledged with this product as Meridian offers 20 per cent prepayment options towards paying down your principal as aggressively as you can. There are certainly some restrictions: The product is exclusive to homeowners purchasing a new home or transferring a mortgage upon renewal; the offer is only available for owner-occupied homes; there is a maximum amortization of 25 years, and it’s only available in Ontario.
With that being said, this 1.99% product has one key pitfall that may make it an offer you’d like to avoid.
The short 18-month mortgage term opens up the possibility that once the term is up, you will be renewing into a market with higher mortgage rates. Alternatively, taking a five-year mortgage at a slightly higher mortgage rate today may save you more in the long run when it comes to interest. While no one has a (functioning) crystal ball allowing them to predict rates accurately, it certainly does not hurt to be prepared for future scenarios and possibilities.
If you have questions about Meridian’s 1.99% rate and whether an 18-month mortgage term is right for you, fill out the form at the top of the page and speak to a MonsterMortgage.ca mortgage expert today!
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