Hybrid mortgage
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!
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:
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 yourGross 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
Increased purchasing power
Lower monthly payments and debt service ratios mean you may qualify for a larger mortgage
Affordable monthly payment
Gives you breathing room for other regular expenses and savings
Flexible payment options
Make interest-only payments or principal and interest payments on the Hybrid Loan portion without penalty
Peace of mind
Rest easy knowing you’re borrowing from an established and regulated financial institution
We’re here for you
Our expert mortgage specialists will support you every step of the way on your mortgage journey
Credit protection
Mortgage protection/creditor insurance is available to ensure your investment is protected, even when the unexpected should happen
Is the Hybrid Mortgage right for you?
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?
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You expect your income to increase notably over the next 5 to 10 years
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You want to get into your dream home now
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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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