As one of the largest financial cooperatives in Canada, Desjardins offers a range of products and services to millions of members across the country. Desjardins provides borrowers with competitive mortgage rates and flexible lending options regarding home financing. This 2024 review looks at everything you need to know about Desjardins mortgages.
An Introduction to Desjardins and Desjardins Mortgages
Founded in 1990 in Levie, Quebec, Desjardins is North America’s largest Canadian caisse populaire and credit union, with over $442 billion CAD in total assets.
Desjardins has the largest regional presence in Quebec and Ontario, with 204 local credit unions operating 661 points of service and serving more than seven million members and clients.
Desjardins offers a full range of personal and business banking products, investment services, and insurance policies. The cooperative maintains a strong community focus, emphasizing member education and social responsibility.
With this level of scale and experience, Desjardins offers borrowers competitive rates and knowledgeable support when financing a home.
What are Current Desjardins Mortgage Rates?
Desjardins offers borrowers different types of residential mortgages with both fixed and variable interest rates.
Desjardins Fixed Mortgage Rates
Fixed-rate mortgages have an interest rate that remains unchanged throughout the mortgage term. Desjardins offers competitive fixed rates with terms ranging from 6 months to 10 years.
Here are the current advertised fixed mortgage rates from Desjardins as of September 2024:
| Term | Interest rate |
|---|---|
| 6 months | 7.99% |
| 1 year | 7.24% |
| 2 years | 6.84% |
| 3 years | 6.49% |
| 4 years | 4 years (special rate) | 6.44% | 4.69% |
| 5 years | 5 years (special rate) | 6.49% | 4.79% |
| 6 years | 6.59% |
| 7 years | 6.69% |
| 10 years | 7.14% |
These rates are for high-ratio mortgages with less than 20% down payment. Conventional mortgages with 20% down or more may receive discounted rates.
Desjardins 5-year fixed rates compared to Big Six Banks in September 2024:
| Lender | 5-Year Fixed Rate |
|---|---|
| Desjardins | 4.89% |
| RBC | 5.34% |
| Scotiabank | 5.34% |
| TD | 4.79% |
| CIBC | 4.99% |
| HSBC | 4.64% |
| National Bank | 4.84% |
Desjardins Variable Rate Mortgages
Variable-rate mortgages fluctuate along with the prime rate. Desjardins offers 5-year variable-rate mortgages with the following options:
| Term | Type | Interest rate |
|---|---|---|
| 5 years | Closed protected mortgage | 6.70% |
| 5 years | Closed reduced mortgage | 6.45% |
| 5 years (special rate) | Closed reduced mortgage | 6.00% |
(Source: https://www.desjardins.com/qc/en/mortgage/mortgage-rates.html)
Desjardins 5-year variable rates are competitive, beating most major banks.
Understanding Desjardins Mortgage Prime Rates
Like all lenders, Desjardins bases their mortgage rates on the Prime Rate, which is currently 6.45% as of September 2024. The Bank of Canada sets the Prime Rate and influences borrowing costs economy-wide.
Desjardins mortgage rates consist of the Prime Rate plus or minus a set percentage, known as the discount or spread. For example, a 5-year fixed mortgage rate of 4.79% is the 6.45% Prime Rate minus a 1.66% discount. Variable mortgage rates also follow the Prime Rate closely but fluctuate monthly as the Prime Rate changes.
By monitoring moves in the Prime Rate, borrowers can predict if Desjardins mortgage rates are likely to increase or decrease in the near future. Over the past two years, the Bank of Canada has rapidly raised rates, leading to higher borrowing costs at Desjardins and other lenders. But there are now signs of rate hikes slowing as inflation cools.
Other Desjardins Mortgage Options
In addition to fixed and variable mortgages, Desjardins offers alternative lending solutions, such as a HELOC and special payment plans, to help borrowers finance their homes.
Desjardins Home Equity Line of Credit (HELOC)
A home equity line of credit (HELOC) allows homeowners to borrow against the equity they’ve built in their property. As of September 2024, Desjardins offers HELOC rates as low as 6.95%.
Once 20% equity is reached, borrowers can access up to 65% of their home’s value with a Desjardins HELOC. This revolving line of credit secured against the home can be helpful for debt consolidation, renovations, or other large expenses.
Desjardins Rental Property Mortgage
Desjardins offers tailored financing options for real estate investors looking to purchase a rental property. Loan terms range from 1 to 10 years, with options for fixed, variable, or combined interest rates. Investors can also use other properties in their portfolio as collateral.
With the multi-project option, investors can reborrow up to the original loan amount. The loan amount is determined by the property’s value and quality and the investor’s specific needs, offering flexibility for landlords managing multiple rental properties.
Desjardins Hybrid Mortgages
Desjardins offers hybrid mortgages that allow you to customize interest rates, terms, and payment schedules. The flexibility of hybrid mortgages accommodates unique co-borrowing situations when financing a home with family members or buying a shared property, giving co-borrowers more control over their financing.
Desjardins Mortgage Features
Desjardins mortgages come with a variety of features and options to fit different borrower needs:
Desjardins Rate Locks
Mortgage rate locks allow you to secure a mortgage rate for up to 120 days while searching for a home. This feature is available on both fixed and variable-rate mortgages from Desjardins. Rate locks provide payment stability and protect against rate increases during the home-buying process.
Increasing Payments Amount and Frequency
Desjardins provides ways for borrowers to increase their mortgage payments and repay their loans faster. On closed mortgages, borrowers can raise their payment amount once annually, up to double their regular payment. There is no fee for this option.
Additionally, choosing more frequent payments, such as weekly or bi-weekly instead of monthly, can accelerate repayment, the same as making one extra payment per year. This feature reduces interest costs over the life of the mortgage.
Desjardins Prepayment Limit
Prepayment means paying down your mortgage principal faster by making lump sum payments. Desjardins offers up to 15% annual prepayment on closed mortgages. Paying above that limit will trigger prepayment charges.
| Lender | Prepayment Limit |
|---|---|
| Desjardins | 15% |
| TD Mortgage | 15% |
| Scotiabank | 15% |
| CIBC | 10% to 20% |
| RBC | 10% |
| BMO | Up to 20% |
| National Bank | 10% |
Desjardins Prepayment Penalty Refund
Penalties are based on the Interest Rate Differential (IRD) formula, which looks at the difference between your mortgage rate and Desjardins’ posted rate. Borrowers are expected to pay 3 months of interest penalties on a variable rate mortgage or IRD penalties on a fixed.
However, prepayment penalties assessed can be fully refunded by Desjardins under certain conditions. To qualify for the penalty refund, you must apply for a new mortgage with Desjardins within 90 days of selling and closing your property. The new mortgage amount you get pre-approved for must be equal to or greater than the amount of your previous mortgage with the same mortgage terms.
Desjardins Green Homes Program
Desjardins provides up to $2000 cash back for LEED or Energy Star-certified homes. They also offer a free one-year mortgage payment plan and home assistance for sustainable and energy-efficient properties.
Desjardins Mortgage Protection Insurance
For borrowers looking to purchase a home, Desjardins offers optional mortgage protection insurance that provides life and disability coverage, adding an extra layer of financial security.
- Helps cover mortgage payments if you become disabled and cannot work
- Pays off some or all of the mortgage balance if you pass away
- Useful for peace of mind and protecting family and property
- Premium cost depends on coverage type, age, and mortgage amount
Why Choose a Desjardins Mortgage?
As a borrower, why might you consider financing your home with a credit union like Desjardins versus one of the big banks? Here are some of the top benefits.
Local Focus and Personalized Service
With its extensive regional branch network concentrated in Quebec, Desjardins emphasizes grassroots presence and community building. Mortgage advisors at local caisses populaires can provide personalized guidance and support based on borrowers’ unique needs and goals.
Competitive Rates and Flexibility
As shown above, Desjardins offers very competitive mortgage rates compared to Canada’s largest financial institutions. Their discounted Prime-linked rates reflect a cooperative structure’s efficiencies and lower costs.
Desjardins also demonstrates pricing flexibility on a case-by-case basis, meaning borrowers can potentially negotiate mortgage rates under certain conditions. This highlights the advantages of working with a smaller lender.
Credit Union Member Benefits
Desjardins members in good standing can receive patronage dividends based on interest paid. Borrowers also earn Member Advantages points on their mortgages that can be redeemed for rewards or cashback. Credit unions like Desjardins often invest more in local communities than banks.
Range of Products Under One Roof
In addition to competitive mortgages, Desjardins cross-sells various loan options, investments, insurance policies, and other financial products, all accessible through a single trusted provider. The convenience of bundled services makes Desjardins a one-stop shop for many borrowers.
How to apply for a Desjardins Mortgage?
Ready to move forward with Desjardins for your home financing? Here are some tips for getting pre-approved and submitting your mortgage application.
Getting Pre-Approved
Getting pre-approved helps you understand how much mortgage financing you qualify for before making an offer. Desjardins offers pre-approvals online, by phone or in person at a Caisse populaire branch.
You’ll need to provide basic personal information and supporting documents to verify income, down payment funds, employment and credit history. The pre-approval process is free and takes 1-2 business days.
Applying for a Mortgage
Once you have an accepted offer on a property, you can proceed with formally applying for mortgage financing. Desjardins offers an online mortgage application that lets you securely upload all required documents electronically.
Required documents include:
- Valid ID
- Proof of income
- Down payment deposit records
- Home Appraisal
- Mortgage default insurance, if required
Mortgage approval timelines range from 48 hours up to 15 days. You can monitor the status of your mortgage application through online banking. Expect faster approval times if you’ve been pre-approved.
Desjardins Mortgage: Is It the Right Choice for You?
For borrowers located in Quebec or Ontario who want personalized service and competitive rates, Desjardins represents an excellent mortgage financing option worth considering. Their cooperative member-ownership structure provides tangible advantages compared to dealing with shareholder-owned major banks.
However, Canadians outside Desjardins’ core regions may find more branch convenience when selecting a nationwide bank. Alternative lending options like online-only mortgage providers offer even lower rates through discount broker channels.
The best approach is to include Desjardins from multiple lenders in your rate comparisons. Look across banks, credit unions, mortgage brokers, and fintech lenders to find your optimal match for competitive pricing, product features, and customer service access. Desjardins consistently ranks among the top choices for borrowers in Quebec and Ontario.
Looking for the Best Mortgage Options? Discover our Best Banks for Mortgages in Canada
- RBC Mortgage Rates and Reviews 2024
- TD Mortgage Rates and Reviews 2024
- Scotiabank Mortgage Rates and Reviews 2024
- CIBC Mortgage Rates and Reviews 2024
- National Bank Mortgage Rates and Reviews 2024
- BMO Mortgage Rates and Reviews 2024
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FAQs
What documents do I need to apply for pre-approval?
Required documents for pre-approval include valid ID, proof of income, down payment source records, employment confirmation letter, and authorization for Desjardins to access your credit report.
How long does it take to get approved for a Desjardins mortgage?
Approval timelines range from 48 hours to 15 business days once a full application is submitted. Those with pre-approval tend to get faster decisions.
Does Desjardins offer mortgages for rental properties?
Yes, Desjardins offers tailored rental property and investment mortgage options for real estate investors and landlords.
What is the maximum amortization period on a Desjardins mortgage?
The maximum amortization period is 25 years. This means the mortgage is spread out over 25 years for repayment, regardless of the chosen term.
Can I port my Desjardins mortgage to a new property?
Yes, Desjardins allows mortgage portability, where you can transfer the existing mortgage to a new property while maintaining the same rates and terms.
Can I make lump sum payments on my Desjardins mortgage?
Yes, you can prepay up to 15% of the original mortgage amount annually without penalty on most closed mortgages. This goes directly to the principal.
Does Desjardins offer cashback incentives on mortgages?
Desjardins provides up to $2000 cashback on mortgages for LEED or Energy Star certified sustainable green homes.