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Meridian Mortgage Review 2024: A Credit Union Mortgage Broker

Gravatar for Baggio Ma

Written by Baggio Ma

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In Canada, the real estate market and mortgages are always hot topics of discussion. The current landscape is dominated by the big five banks, but there are plenty of credit unions in Canada that offer competitive mortgages as well.

Meridian Credit Union is a well-established credit union in Ontario, operating 89 branches around the Province.

It offers various mortgage types, including fixed rate, variable rate, high ratio, flex line, friends and family, construction, self-employed, and construction mortgages.

This credit union offers competitive mortgage rates and plenty of flexibility when paying your mortgage off.

In this article, we will introduce Meridian Credit Union and the options it provides when it comes to mortgages in Ontario.

Meridian Overview

Meridian Credit Union was established in 2005 after a merger between Niagra Credit Union, and HEPCOE Credit Union was completed. As of 2023, it is the largest credit union in Ontario and the second-largest in Canada, next to Vancity in British Columbia.

Aside from mortgages, Meridian offers plenty of other financial products and services. These include savings and investment accounts, credit cards, loans and lines of credit, and even insurance.

As mentioned, Meridian offers competitive mortgage rates and plenty of different options when choosing the best mortgage for you. When selecting an institution for your mortgage, Meridian offers everything that the big banks offer.

But of course, going with a credit union helps out a not-for-profit small business that reinvests its profits into your financial well-being.

Unfortunately for the rest of Canada, Meridian Credit Union’s mortgages are only available to residents of Ontario.

For those in Ontario, this guide will provide you with everything you need to know about Meridian’s diverse mortgage options.

Related: Meridian Credit Union Review.

Meridian Mortgage Rates

When we talk about mortgage rates, it is the rate of interest charged on borrowing money to pay for your house. This is usually dictated by the prime interest rate that is set by the Bank of Canada. As we have seen in 2023, the higher the prime rate goes, the higher the mortgage rates are.

In Canada, there are two main types of mortgage rates: variable and fixed. The fixed rate is as it sounds: a fixed interest rate for the term of your mortgage. Variable rates can fluctuate with the prime lending rate that is dictated by your lender.

Meridian Fixed-Rate Mortgage

There are certainly benefits to having a fixed-rate mortgage rate. In times of rising interest rates, your payments will stay the same no matter how high the prime lending rate goes. Your initial rate might be higher than a variable rate, but it could also end up being lower in the future.

Here are the Meridian Fixed-Rate Mortgage rates as of January 2024:

Posted RateProductSpecial Rate
7.79%1-year Closed
7.39%2-year Closed
7.04%3-year Closed
6.89%4-year Closed
6.94%5-year Closed6.49%
6.94%5-year Closed High Ratio5.74%

As you can see, most of Meridian’s Fixed-Rate Mortgages are closed. This means that it cannot be renegotiated or refinanced before the end of the mortgage term without an additional surcharge.

Meridian Variable-Rate Mortgage

Variable rates generally have fewer options than fixed-rate mortgages, and it is no different at Meridian. You will notice that there are only two variable options right now: 5-year open and 5-year closed:

Posted RateProduct
9.20%5-year Open
7.20%5-year Closed

At Meridian, you can switch your variable mortgage to a fixed-rate mortgage at any time. Choosing a variable mortgage rate can be a roll of the dice. As you can see, variable rates as of August 2023 are noticeably higher than fixed-mortgage rates.

Meridian Mortgage Features

Aside from fixed or variable mortgages at Meridian, there are several other products to choose from.

Meridian High Ratio Mortgage

This is an excellent choice for first-time home buyers. The Meridian High Ratio Mortgage does not require you to have a 20% downpayment.

Since these are higher loans and often seen as riskier by the lenders, you will need to purchase mortgage default insurance as well. Here are the rates for the Meridian High Ratio Mortgage:

Posted RateProduct
5.74%5-year Fixed Rate Closed High Ratio
6.95%5-year Variable Rate Closed High Ratio

Meridian Flex Line Mortgage

The Flex Line Mortgage has been popular among Canadians in recent years. This is when you open a Home Equity Line of Credit (HELOC) in addition to the mortgage you are borrowing. Meridian’s Flex Line Mortgage allows you to borrow up to 80% of your home’s value and pay it back at any time with interest.

As you pay down the principal of your mortgage, the equity in your home increases. This is made available as a credit line which you can use to fund things like renovations or major purchases.

Friends and Family Mortgage

Another great option for new home buyers who may need some assistance from their families. Meridian’s Friends and Family Mortgage allows up to four people to get a mortgage together. This works for multi-generational families as well.

There is one caveat: one person on the mortgage needs to live there, so it cannot be used for investment properties. It is important to review things like shared liability and joint ownership before going through with Friends and Family Mortgage.

Meridian Construction Mortgage

The Meridian Construction Mortgage can be used for people who are building a new house or major renovations of an existing house. This mortgage is paid in installments and is interest-payment only until the end of construction or renovations.

Meridian Hybrid Mortgage

A unique product to Meridian, the hybrid mortgage is a mortgage and loan in one. This allows you to backload more of the payments for the future when your earning potential is higher.

This mortgage takes 80% of the mortgage value and dividends it into 60% of a hybrid loan and 20% of a traditional mortgage. The loan is paid off by interest-only payments. You will need a downpayment of at least 20% to qualify.

image showing meridian credit union logo for meridian mortgages

Advantages of Meridian Mortgage

As you can tell, Meridian has plenty of options for mortgages. It also offers very flexible ways to pay them off. Meridian allows you to pay up to 20% of your mortgage each year to be mortgage-free sooner.

You can also choose from weekly, bi-weekly, monthly, and bi-monthly payment plans and accelerated weekly and biweekly payment plans. Meridian also allows you to skip a payment if you are feeling the crunch.

Meridian even pays you up to 5% cash back the day your mortgage is advanced. Of course, you will have to pay this back with interest, but it provides some cash flow at a time when it is needed.

You can apply online for a Meridian mortgage, or you can do so in person at one of its 89 branches.

Credit Unions do not require you to pass the mortgage stress test, so there is a higher chance of qualifying for a mortgage at Meridian.

Downsides of Meridian Mortgage

Unfortunately, the website does not give you a ton of details about the mortgage process at Meridian. They do provide mortgage specialists to talk to if you have any questions or concerns.

While the Meridian mortgage rates are competitive, other institutions may have better rates. You should always shop around when considering a new mortgage.

Meridian’s financial services and mortgages are only available to residents of Ontario.

How to Apply for Meridian Mortgage

Applying for a mortgage at Meridian is as simple as a phone call or a few clicks of the mouse online. As we already stated, you must be an Ontario resident to qualify for a Meridian mortgage.

Most of Meridian’s mortgages, except for the high ratio mortgage, will require you to have a 20% downpayment. You will also need to be in relatively good financial standing and qualify for a Meridian mortgage, even though you do not need to pass the mortgage stress test like at a big Canadian bank.

Certain Meridian mortgages will require stricter requirements. For example, the Meridian Self-Employed Mortgage requires more financial information and verification of assets than other mortgages.

The Construction Mortgage requires inspectors to visit your site to make sure construction is going according to plan.

There are also a few metrics that Meridian will take into account. The Gross Debt Service Ratio says that no more than 32% of your gross annual income should go to paying shelter costs.

The Total Debt Service Ratio says that no more than 40% of your gross annual income should go to paying shelter costs plus all household expenses.

Is Meridian Mortgage Safe and Legit?

Absolutely! Meridian Credit Union has a great reputation in Ontario and has over CAD 30 billion in assets under management. With so many Meridian mortgage options available, it is easy to see why residents of Ontario have trusted Meridian all these years.

As of 2023, Meridian has over 365,000 satisfied customers, many of whom use one of Meridian’s mortgage options to pay for their homes.

FAQs

What is the penalty for breaking a mortgage with Meridian?

The Meridian Mortgage prepayment penalty is the greater value between 3 months’ interest or the Interest Rate Differential (IRD). The IRD Is calculated by taking your current interest rate and comparing it to the posted interest rate. This difference is multiplied by the time left on your mortgage term to determine the IRD amount.

Who is Meridian Bank owned by?

Meridian is a credit union, so it is 100% owned by its customers. Being a credit union means it is a not-for-profit business, and each customer owns a share of the company.

What kind of bank is Meridian?

Meridian is a credit union that focuses on providing higher interest rates on savings and lower fees to customers compared to the major banks.

When was Meridian Bank founded?

Meridian was founded in 2005 when Niagra Credit Union and HEPCOE Credit Union merged together.

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Author

Gravatar for Baggio Ma
Baggio Ma

Baggio Ma has written extensively on financial topics over the past several years. His work experience in the private, public, and not-for-profit sectors has led to a special interest in personal finance-related topics. Baggio has written for several Canadian finance sites such as PiggyBank and Tech Daily. Baggio holds a Bachelor of Arts degree from the University of British Columbia and a Master of Public Administration Degree from the University of Victoria.

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