Unlike the banks, Meridian Credit Union doesn’t worry about calls from the Department of Finance urging it to price 5-year mortgages above 3.00%. It’s a good thing it doesn’t because the company, Ontario’s largest credit union, has rolled out a new 2.99% five-year fixed mortgage.
On an advertised basis, it’s the lowest 5-year fixed rate of any lender in the country, according to CMT’s sister site RateSpy.com. The mortgage comes with a 45-day rate hold and all the bells and whistles, including a 20% annual prepayment privilege, portability (within the province), bridge financing, optional skip-a-payment, etc.
“We wanted to get out there early (in advance of the spring market),” said Bill Whyte, Chief Member Services Officer at Meridian.
“Meridian wants to compete with the banks and give Ontario homeowners some choice. In this case, we had an opportunity to give people a great rate.”
That “opportunity” is in reference to Meridian’s enviable liquidity position at the moment. The company securitizes some of its mortgages, but the majority of funding for this special rate comes from deposits. “We had a very successful fall campaign in raising deposits so we want to put that money to work.”
The company’s 2.99% promotion is only good in Ontario and has no official deadline. How long it lasts “depends on external market factors” like the bond market, states Whyte. (Fixed mortgage rates track bond yields.)
The offer is available only through Meridian’s retail branches and its mobile mortgage specialists.
Will other lenders match Meridian? “I’m not sure they won’t,” he says. The spring market is typically when lenders pull out all the stops to be competitive.
Factoid: In 2013, Meridian Credit Union was ranked with the best online service of any Canadian credit union, according to a year-long mystery shopping program conducted by research firm Surviscor.
Rob McLister, CMT (email)