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A unique mortgage solution | The Hybrid Mortgage explained | Why the Hybrid is a good idea | Is the Hybrid Mortgage right for you?| Mortgage resources | How to apply

A loan + mortgage mix that can get you into your dream home sooner

The path to home ownership can be a long one. Even with a 20% down payment, as a new professional or recent graduate, you may not yet have the income needed to qualify for a traditional mortgage.

With the Meridian Hybrid Mortgage, you won’t have to put your dreams of home ownership on hold.

What makes the Hybrid Mortgage unique?

The Meridian Hybrid Mortgage is an innovative solution that combines a loan with a conventional mortgage. This product mix makes it easier to qualify for the mortgage you want.

Unique to Meridian, the Hybrid Mortgage considers your future borrowing potential. It offers an opportunity to purchase a home now – while you’re still getting established in your career – and transitions you into a conventional mortgage at a later date.

It makes what’s possible for your future self, possible today!

The Hybrid Mortgage, explained

With our Hybrid Mortgage, you can borrow up to 80% of a home’s purchase price. The loan portion makes up 60%, and the conventional mortgage portion makes up 20%. To apply for this type of mortgage, you will need a down payment of at least 20%.

The Hybrid Mortgage is based on a 5-year plan; as your income increases over time and your financial situation improves, you can move from the Hybrid to a standard mortgage.

Example: The home you want to purchase costs $525,000, and you have a 20% down payment of $105,000. This means you need a mortgage of $420,000. The two parts of the hybrid mortgage are broken down like this: Hybrid Mortgage example Row 1, Column 1 Loan portion (60%) = $315,000 Affordable interest-only payments A lower interest rate on the higher balance portion Row 1, Column 2 Conventional Mortgage portion (20%) = $105,000 Principal and interest payments A higher interest rate on the smaller balance portion Row 3 Total mortgage amount (80%) = $420,000 Hybrid Mortgage example Row 1, Column 1 Loan portion (60%) = $315,000 Affordable interest-only payments A lower interest rate on the higher balance portion Row 1, Column 2 Conventional Mortgage portion (20%) = $105,000 Principal and interest payments A higher interest rate on the smaller balance portion Row 3 Total mortgage amount (80%) = $420,000


Why the Hybrid Mortgage is a good idea

It makes home ownership possible and affordable

When you apply for a traditional mortgage you are evaluated based on a number of factors, including Total Debt Service (TDS) and Gross Debt Service (GDS) ratios. Lenders use these measures to determine whether you have enough income to manage mortgage payments and other expenses. 

While similar mortgage products are offered through alternative lenders, the interest rates can be cost prohibitive. With the Meridian Hybrid Mortgage, the larger portion of your mortgage is an interest-only loan. This means that your monthly mortgage payments will be more affordable, leaving you some breathing room for other expenses and savings, which reduces your TDS ratio. It’s designed to make sure that you qualify for the mortgage you need.

Also, you pay principal and interest on the smaller, conventional portion of the mortgage, which means you reduce your mortgage principal on the highest interest-rate portion first.

 

You expect to see your income increase substantially over the next 5-10 years

You’re new in your career, or a recent graduate of a professional program

You already have a down payment of 20%

Through personal saving or as a gift from parents or family

 

With our Hybrid Mortgage, you can purchase your dream home today, rather than down the road where prices and rates could be much higher. The unique structure of the Hybrid Mortgage makes home ownership a possibility for more Canadians. 

Learn about mortgages

How to get a Hybrid Mortgage

Talk to us about getting a Meridian Hybrid Mortgage.
Get in touch or arrange for one of our Mortgage Specialists to come to you. It’s easy.

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