* Not available to residents of Quebec.
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All our online mortgages come with flexible prepayment privileges. Pay up to 20% of your original mortgage balance per year. Closing costs are covered up to $800.
Assuming no additional fees are charged, the Annual Percentage Rate (APR) is the same as the Interest rate.
Rates calculated semi-annually not in advance.
Closing costs covered up to $800!
How about that? A little extra money in your pocket must feel good. It's common to overlook closing costs toward the end of the buying process and most people find themselves strapped for cash as a result.
To help you out, we'll give you up to $800 to cover legal fees and appraisals. That should make up for those nearly endless coffee runs. Here's to your new home. Cheers.
Mortgage-Free in 4 steps.
1. Instead of monthly payments, consider semi-monthly, biweekly, or weekly. It's easy and because you're making payments a bit sooner each month, it adds up to big savings over the years.
2. Shorten your amortization period: the number of years needed to pay off your mortgage. The less time it takes, the less you pay in interest.
3. Increase your regular payments by as much as double the current amount if you can afford to.
4. Each calendar year you can make an additional payment of up to 20% of your original mortgage balance, which is a fast route to mortgage freedom.
These options are available for all mortgages. Each calendar year the sum of options 3 and 4 cannot exceed 20% of the original mortgage principal. Prepayment penalties may apply for principal payments over the stated annual limit.
To learn more about paying off your mortgage faster, visit the Financial Consumer Agency of Canada's website at: http://www.fcac-acfc.gc.ca
Life is too short to worry. Learn about how this comprehensive coverage can give you peace of mind over life’s twists and turns. Alterna provides mortgage protection in case of the diagnosis of a critical illness, total disability, involuntary loss of employment and loss of life.
Critical illness insurance covers you in the event of falling victim to a life threatening illness.The insurable balance at date of diagnosis of a critical illness plus accrued interest plus settlement interest and any mortgage pre-payment penalty will be paid for cancer, stroke or heart attack✝. Maximum coverage is $1,000,000 and coverage ceases at age 75.
In the event of a disability, the insured Alterna mortgage’s monthly mortgage payments will be paid up to a maximum of $3,000 per month for 24 months (per claim) up to age 75.
Involuntary Loss of Employment
If you lose your job, your insured monthly mortgage payments will be paid up to a maximum of $3,000 per month for nine months (per claim) up to age 75.
In the event of death the insured Alterna mortgage balance plus accrued interest plus settlement interest up to age 75 will be paid to a maximum of $1,000,000 plus any mortgage pre-payment penalty.
When you apply for a mortgage, we will call you to discuss your mortgage insurance needs.
Mortgage default insurance insures Alterna against a default of payment by homeowners. Alterna requires mortgage default insurance for fully qualified properties and approved applicants when homeowners do not provide at least 20% of the purchase price as a down payment.
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Learn more about Alterna Bank mortgages & fees
You've got questions?
We've got answers.
A mortgage is a loan used to buy real estate. In your case, a home. Phrases you hear about a mortgage include Amortization and Term, Fixed or Variable Rates, Equity and Principal. More about these below.
A closed mortgage usually provides a lower interest rate than an open mortgage. However, it can’t be prepaid, renegotiated or refinanced without incurring a penalty.
An open mortgage may carry a slightly higher interest rate than a closed mortgage, but it gives you the choice of paying your mortgage off whenever you like, without penalty.
Fixed rate mortgages
A fixed rate mortgage has a set interest rate for its entire term. This means you get the advantage of always knowing what your payments will be. We offer fixed rate mortgages with terms from 6 months to 10 years.
Variable rate mortgages
With a variable rate mortgage your interest rate fluctuates with Alterna's Prime rate, which can help you save if interest rates fall during your mortgage term. But if interest rates go up, so will the cost of borrowing. The good news is our variable rate closed mortgages can be converted to a fixed rate mortgage at any time.
Yes, you do. A down payment of over 20% of the home cost is called a conventional mortgage. A down payment of less than 20% is called a high-ratio mortgage and will require mortgage default insurance.
If this is your first home, there’s the federal government’s Home Buyer’s Plan. It lets you withdraw up to $35,000 from your RRSP without a penalty - ask us for details. We also have great rates and products to make the most of your savings before your buy.
Your down payment
A conventional mortgage requires a down payment of at least 20% of the purchase price. If you make a down payment of less than 20%, you will need to get mortgage default insurance, through a provider such as the Canada Mortgage and Housing Corporation (CMHC) or SagenTM. In some cases, mortgage default insurance may be required even with a 20% down payment.
The premium charged for mortgage default insurance is based on the mortgage amount and the size of the down payment. For your convenience, it can be paid as part of your regular mortgage payments.
For more information, speak to one of our mortgage specialists.
Your monthly payments
As a general rule, you should plan to spend no more than about 32% of your gross annual income on housing. This means if your family’s gross annual income is $55,000, you should aim to pay no more than $17,600 a year or $1,467 a month for:
- Mortgage payments
- Property taxes
- Condominium fees
You should also try to ensure that your housing expenses plus other financial liabilities, such as payments on personal loans, credit cards, childcare expenses or support payments, add up to less than 40% of your gross annual income.
Visit our Mortgage Calculator for a further breakdown.
Pre-approval takes the guesswork out of house hunting
Before you start looking at homes, find out exactly how much you can borrow. Our knowledgeable mortgage professionals can help you to determine this amount based on your down payment and the monthly payments you can afford.
Once you have your mortgage pre-approval, you’ll be ready to house hunt with confidence knowing you can make an offer quickly if the perfect place comes along.
The federal Home Buyers' Plan (HBP) allows first-time home buyers to withdraw up to $35,000 from their Registered Retirement Savings Plan (RRSP) to buy a qualifying residence. You then have up to 15 years to repay your RRSP in annual instalments. To qualify, neither you nor your spouse can have owned a home in the last five years.
It’s important to note that some RRSPs, such as locked-in or group RRSPs, do not allow you to withdraw funds. So, be sure to ask your RRSP issuer for information about the type of RRSP you have and whether withdrawals are allowed.
The federal First-Time Home Buyer Incentive also helps first-time home buyers reduce their monthly mortgage payment. The incentive provides up to 5% for the purchase of an existing home and up to 10% for a new build. To qualify, your household income must be less than $120,000 ($150,000 if you live in the Toronto, Vancouver or Victoria Census Metropolitan Areas) and neither you nor your spouse can have owned a house in the year of acquisition or in any of the four proceeding years. The amount of an insured mortgage and the CMHC incentive is capped at $480,000, meaning the maximum home price you could purchase with a 15% down payment is $565,000.
Homeowners do not have to pay interest on the incentive, but money must be paid back after 25 years or when the property is sold, whichever comes first. The government will share in the upside or downside of any change in property value.
Savings adds up over time.
The following is for illustrative purposes only and assumes a mortgage rate of 3.09%.
Cost of Mortgage Insurance
Size of Mortgage
Savings over 25 years
That will depend. But as a general rule of thumb, you should budget no more than 35% of your monthly income toward paying for your home. That’s everything including your mortgage payment.
Amortization is the number of years it takes to pay down a mortgage to zero. A typical amortization period is 25 years. Term is the length of time your mortgage agreement is in effect. A mortgage with a five year term will need to be renegotiated or paid in full after five years.
There’s no set answer. It depends on your situation. A fixed rate stays the same for the term. A variable rate changes with the prime interest rate. Some people like the stability of budgeting with a fixed rate. Variable rates can be lower than fixed rates, but they come with a bit of uncertainty.
Equity is what you own in the house. It’s the difference between what you owe and how much the house is worth. Principal is the amount of money you owe on the mortgage. Principal and interest make up your monthly payment.
Here’s what you should be thinking about. You’ll need a lawyer. There’s land transfer taxes and home insurance to remember. If you have a high-ratio mortgage, you’ll have to pay mortgage default insurance. And don’t forget to put some money aside for a moving van and pizza.
You can choose from a number of mortgage options, including fixed or variable, open or closed, to meet your needs and lifestyle. Our homebuying specialists can assist you along the way.
This handy checklist will help you prepare for your first meeting with your Alterna mortgage representative, plus give you an idea of costs normally associated with home purchases.
Building your homebuying team
Once you are ready to look for a home, it's time to assemble a team of professionals who can support you. The mortgage professionals at Alterna can help you choose the right mortgage for your needs and provide you with a mortgage pre-approval—so you’ll know exactly how much you can afford to spend.
Other professionals who can help you in your homebuying journey:
- Realtor: Although you can purchase a home without a realtor, it’s a good idea to enlist the services of an agent. By providing a realtor with a detailed description of your needs, they can offer you objective advice and help you find and compare a number of properties.
- Home inspector: A clean bill of health from a qualified home inspector can help ensure you’re not buying a home with any hidden surprises. When hiring an inspector, it’s wise to ask for references.
- Lawyer: A real estate lawyer can help protect your interests by preparing and reviewing documents related to your purchase agreement, mortgage documents, title documents and transfer documents.
Anticipating your closing costs
Know what to expect well in advance of the day of closing. You'll need to budget for:
- CMHC or SagenTM insurance premiums: This will apply if you buy a home with less than a 20% down payment.
- Land transfer taxes: The provincial government levies this one-time tax when you buy a home. The amount could come to about $20,000 on a $700,000 home (be sure to ask your lawyer for details on your particular situation). If you are a first-time homebuyer of a newly constructed home, you may be entitled to a rebate.
- Legal fees: You are responsible for paying your lawyer's fees and disbursements. Services your lawyer may charge for include conducting a title search, drafting the title deed and preparing the mortgage.
*Rates subject to change
All Mortgages: Special promotional rate may be changed or withdrawn at any time without notice. Cannot be combined with any other offer or discount. Maximum Amortization of 25 years. Maximum property value of $1,000,000. Funds must be advanced within 120 days of application. Applies to owner-occupied residential properties only. Some conditions apply.
Rates available for online mortgages only.
Variable Mortgages: Prime refers to the Alterna Prime Rate. Alterna Prime Rate is currently 6.70% as of January 27, 2023. Your interest rate will change whenever the Alterna Prime rate changes. Rates calculated monthly not in advance.
Creditor’s group insurance coverage is optional and is underwritten by Co-operators Life Insurance Company. Supporting services, such as enrollment intake, medical underwriting and claims administration are provided by the employees of CUMIS Services Incorporated. Coverage is governed by the terms and conditions of the creditor’s group insurance policy issued to the creditor and is subject to terms, conditions, exclusions and eligibility requirements. See the Product Guide and Certificate of Insurance for full coverage details.
†See policy for full coverage details, including restrictions.
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