ONTARIO, Canada–A credit union here in a market known for aggressive mortgage rates has kicked things off by announcing a one-year, fixed-rate mortgage at 1.69%.
Meridian Credit Union said it is “going against the trend set by banks and lenders,” according to a statement from Chief Member Services Officer Bill Whyte. “We are able to take advantage of the current bond and lending environment and pass those savings onto our members.”
While the U.S. Federal Reserve has moved to nudge rates up, declines in the stock market and concerns over a slowing of the economy in North America has not led to much pressure on rates. Variable rate mortgages here are linked to the Bank of Canada's lending rate, which is not expected to rise anytime in the near future.
Beyond the one-year, fixed rate, 1.69% product, Meridian also has a five-year fixed at what it calls a “special rate” of 2.59%, and a “20/20” program that permits borrowers to repay up to 20% of the principal every year, at any time, without penalty.
The new mortgage offers are rolling out at the same time new mortgage lending rules have gone into effect in Canada, where a minimum down payment of 10% is now required on new insured mortgages (up from 5%) on the portion of home prices above $500,000. That rule will take effect Feb. 15, 2016.