Mortgages

For many of us, purchasing a home is one of the biggest investments we will make in our lifetime. Since a mortgage is likely the biggest debt we will have as well, it is important that we understand the types of mortgages and repayment options available and learn ways of paying off our mortgage as quickly as possible.

Variable or fixed rate mortgage?

The interest rate on a variable rate mortgage fluctuates with market interest rates. The advantages of a variable rate mortgage include:

• the interest rate is usually lower than a fixed rate mortgage
• there is no penalty involved if you prepay your mortgage
• you can usually change to a fixed rate mortgage at any time

Since a variable rate mortgage fluctuates with market interest rates, the interest rate can increase dramatically along with your monthly mortgage payment. This can be a problem for people who are on tight budgets.

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As the name implies, the interest rate (and the monthly payment) on a fixed rate mortgage is fixed for a specified period of time. The advantages of a fixed rate mortgage include:

• the interest rate is guaranteed to remain the same for a specified period of time, which is a particular benefit when interest rates start to rise dramatically
• your monthly principal and interest payment remains the same during that period
• fixed rate mortgages are a benefit to people who are on tight budgets

Call one of the mortgage professionals at Winnipeg Police Credit Union at 946.0551 to discuss the mortgage options and repayment terms that are right for you.

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In the market for a new home?

It makes sense to arrange for a pre-approved mortgage before you start shopping for a home. The mortgage professionals at Winnipeg Police Credit Union can work with you to identify the maximum purchase price and the size of mortgage that you can afford, review the mortgage options and repayment terms that will work best for you and also give you an idea of the potential costs involved in purchasing your home. The pre-approval process takes some of the guesswork out of home buying, which makes it more comfortable for you.

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Looking for ideas for paying your mortgage off faster?

Here are some strategies you should consider to pay your mortgage off faster:

• Pay more frequently – make bi-weekly or weekly payments rather than monthly 
• Make lump sum payments whenever possible (e.g.: contribute to an RRSP and apply the income tax refund as a lump sum mortgage payment)
• Keep your mortgage payments the same when your mortgage renews at a lower interest rate
• Increase each mortgage payment by as little as $10 when you get a pay raise

Here is an example of the impact of paying your mortgage bi-weekly rather than monthly.

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EXAMPLE USED

Mortgage amount - $100,000
Interest rate – 8.0%
Amortization period - 25 years
Bi-weekly payments – $381.60
Monthly payment - $763.21

Please note: Accelerated bi-weekly payments

Accelerated bi-weekly payment options are calculated by taking your normal monthly payment and dividing it by two and making the resulting payment amount every two weeks. Since you would be making 26 bi-weekly payments, by the end of a year you will have made the equivalent of one extra monthly payment. This additional amount and the increased payment frequency can save you thousands of dollars in interest and take years off your mortgage. In the example below the mortgage would be paid approximately 5 years earlier, with an interest savings of $30,475.99!

Results – Bi-weekly   Total payments - $197,710.11  Total Interest - $97,710.11

Results – Monthly Total payment - $229,358.86 Total interest - $129,358.86

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Cash Back Mortgages

There are two "cash back" mortgage options available to you at Winnipeg Police Credit Union. 

The first option is ideal for people who need extra funds for renovations, new furniture or applicanes or any other purpose you may have. Arrange a 5 year fixed-term mortgage at the special "cash back" interest rate and receive 5% of the principal to spend whichever way you see fit.

The second option is a great fit for first time home buyers who are having trouble saving for a down payment. Qualifiying borrowers would receive 5% of the purchase price of a home for their down payment!

Need more information? Call one of our mortgage professionals at 946.0551 TODAY. They'll be happy to discuss your options and decide on the purchase price and mortgage terms that are right for you!

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Special features and benefits of a Winnipeg Police Credit Union Mortgage

• 20% annual prepayment privilege without penalty
• No renewal fees (typically $85 - $150)
• Fast approvals – pre-approvals for qualifying borrowers 
• Repayment terms to meet your budget
• WPCU will pay your appraisal fee OR application fee for CMHC insured mortgages
• Optional life and disability insurance available to qualifying borrowers

For more information please call 946.0551 TODAY or email info@policecu.mb.ca

Mortgage Glossary
Becoming Mortgage Free
Building the Perfect Mortgage
In Debt? Here's How to Get Out of It!

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