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.
Rob McLister, CMT
Last modified: April 28, 2014
If your clients want to refinance or port over to these credit unions leave plenty of time as they are 4-6 weeks for an answer. Also some of these lenders want a full banking relationship and the client to sign up for mortgage life insurance.
Prospera is nuts..CONS are way to scary!
12 month pre-payment penalty will more than make up for lost revenues on the .1% lower rate offered. Even if only a few mortgages are discharged, at a penalty of 4x the normal amount it’s no wonder they are offering that rate.
Hope people understand the product before hopping on the rate train.
I am currently selling my home due to financial reasons, I cant afford it and have a difficult time in my life in the past two years. I am getting stung with a $12,000 penalty, I am discharging the mortgage less than two years early. I am going to walk away with nothing. Prospera isn’t helpful at all, they are just worried about the money they are going to get from me for the penalty. I have been with Prospera for almost 30 years now, had a few mortgages, they have made good money from me, but now when I need a little help they wont lift a hand to help. I would not recommend this mortgage.
Prospera is supposed to be a small community bank that supports you, NOT