B.C. remains a mortgage rate battleground with brokers and credit unions (Coast Capital, G&F, Prospera, Vancity, Westminster Savings) dominating, at least in terms of advertised rates.
At the moment, Prospera Credit Union’s 3.55% MyStyle mortgage is one of the cheapest publicized 5-year rates. Here are the details:
Pros: It’s one of the lowest advertised B.C. rates since fall 2010; $1,500 cash back; 10% payment increase privileges per year; portable & assumable; online mortgage access.
Cons: No lump-sum prepayments allowed; brutal 12-month interest penalty for early termination.
Despite the penalty and restrictions, Prospera Senior Marketing Manager, Terri-Lee Binnie, says there is uptake from “members who have no intention of paying it off early or making prepayments…such as first-time homebuyers.”
On the other hand, full-featured mortgages are just 10 basis points higher. So if there’s a chance you’ll need to refinance or make prepayments, 0.10 percentage points in rate is an absolute pittance for that flexibility.
And remember, the best rates are not always advertised, and the cheapest rate often doesn’t have the lowest overall borrowing cost. You’ve got to shop around and compare all terms and restrictions. Do a little research online and then call a broker or different lenders to analyze the various deals in town.