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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 traditional mortgage at a later date.

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

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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 a maximum of 60%, and the conventional mortgage portion makes up a minimum of 20%. To apply for this type of mortgage, you will need a down payment of at least 20%.

Let’s say the home you want to purchase costs $850,000, and you have a 20% down payment of $170,000. This means you need to borrow $680,000. The two parts of the hybrid mortgage are broken down like this:

Hybrid Mortgage example

Row 1, Column 1
Loan portion (60%) = $510,000
Affordable interest-only payments
A lower interest rate on the higher balance portion

Row 1, Column 2
Conventional Mortgage portion (20%) = $170,000
Principal and interest payments
A higher interest rate on the smaller balance portion

Row 3
Total mortgage amount (80%) = $680,000

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    On the larger loan component (60%), you’ll pay interest only, which means a more affordable monthly payment and breathing room for other expenses and savings. Most importantly, having lower monthly payments brings down your Gross Debt Service (GDS) ratio and your Total Debt Service (TDS) ratio – factors lenders look at when evaluating your application and determining whether you have enough income to qualify for the mortgage. Having lower GDS and TDS ratios means you may qualify for a larger mortgage and increase your purchasing power to buy your dream home today.

    On the conventional mortgage component (20%), you’ll pay principal and interest, which means reducing your principal on the higher interest-rate portion first.

The Hybrid Mortgage is a short-term solution within a long-term plan. As your income increases over time, your mortgage advisor will work with you to move from the Hybrid to a standard mortgage.

Why the Hybrid Mortgage is a good idea

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Increased purchasing power: lower monthly payments and debt service ratios mean you may qualify for a larger mortgage

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Peace of mind: rest easy knowing you’re borrowing from an established and regulated financial institution

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Affordable monthly payment: gives you breathing room for other regular expenses and savings

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We’re here for you: our expert mortgage specialists will support you every step of the way on your mortgage journey

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Flexible payment options: make interest-only payments or principal and interest payments on the Hybrid Loan portion without penalty

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Credit protection: mortgage protection/creditor insurance is available to ensure your investment is protected, even when the unexpected should happen

The unique structure of the Hybrid Mortgage makes home ownership a possibility for more Canadians.

How do you know if the Hybrid Mortgage is right for you?

  • You expect your income to increase notably over the next 5 to 10 years

  • You want to get into your dream home now

  • You already have a down payment of 20%

The Hybrid Mortgage is a great option for new graduates, young professionals, tradespeople, and new Canadians.

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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.