What is a mortgage, and why do I need one?

You’re ready to take the plunge and make a big investment in your future; you're buying a house. Chances are that you are going to need a mortgage to help you with that purchase. A mortgage, the loan to finance the purchase of your home, is probably the largest debt that you will take on. At Souris Credit Union, we understand how making a big purchase will impact your finances. We take the time to learn about your financial goals so we can tailor a plan that will work for you today, through to the end of your term.

Choosing Your Credit Union.

Souris Credit Union knows that no two households’ financial needs are the same. That’s why we are dedicated to providing you with the most effective financial service and wise financial guidance for you.

Top 3 things you need to know about buying your home

  1. Pre-qualification vs Pre-approval.
    Getting a mortgage pre-qualification is a useful estimate of how much you can afford; however, a pre-approval is much more beneficial. A pre-approval means that the lender has verified your documentation, and has actually approved you for a specific loan amount. Having your pre-approval letter doesn’t only help you narrow down your price range, it also lets home sellers know that you are a serious prospect.
  2. Buy the house you can afford now, and later.
    Our mortgage specialists will help you make sure you’re not overstretched when buying your house. This is important to pay for the necessities of life, as well as your lifestyle. But we also know that circumstances can change: children, new cars, school, and interest rates. Don’t worry, our experts will work with you now and then to ensure you have room in your budget.
  3. Work with experienced professionals.
    Your Credit Union professionals can provide you with practical advice to ensure your finances are on track when buying your home. But don’t just stop there. Before making your purchase, hire a licensed home inspector to identify potential issues with the house you are looking to buy. In addition, ensure that you have a lawyer with positive referrals that you can trust to help avoid any legal surprises.

Choosing a Mortgage that's right for you

Souris Credit Union offers many mortgage options to fit your financial goals. There are three keys variables to define when selecting a mortgage for you:

  1. Interest Rate
  2. Purpose
  3. Commitment

You can select any combination of the three to best fit your needs. Check out the comparison tables below to determine which mortgage combination is best for you.

1. Interest Rate




  • Interest rate is set and not subject to change over the course of your term.
  • Payments are set in advance for your term, giving you the security of knowing exactly how much your monthly payments will be.
  • Excellent choice if you want the peace of mind of knowing exactly how much your monthly payment will be.



  • Interest rate will fluctuate with changes in the Prime rate.
  • Payments may increase or decrease with fluctuations in the Prime rate.

  • Excellent choice if you can tolerate a fluctuation in your monthly rate.

2. Purpose




  • A property loan that does not exceed 80% of the purchase price and does not require loan insurance.
  • Items such as the principal amount owing, interest rate, term, and payment amount are agreed upon in the mortgage agreement.
  • Excellent choice if you are looking to only finance a home.


  • A mortgage that secures a loan by way of a promissory note. The money borrowed can be used to buy a property or can be used for another purpose, such as a home renovation or a vacation.
  • Gives you the ability to change loans and other credit agreements without having to register a new mortgage.
  • Excellent choice if you are looking to finance a home and other big ticket items such as renovations or debt consolidations all with a single monthly payment.

3. Commitment




  • Permits repayment of the principal amount at any time, without penalty.
  • Generally, interest rates are higher than a closed mortgage.
  • Excellent choice if you are planning on paying off your mortgage in the near future.



  • Cannot be repaid before its term without incurring prepayment penalties, except as disclosed in mortgage agreement
  • Generally, interest rates are lower than open mortgages.
  • Excellent choice if you are not planning on paying off your mortgage earlier than your term.

Our Expert Advice

Learn more about home buying your first home with our first time home buyers guide. Click the image to download a PDF copy.

Let's Talk About Your New Home

Meet with one of our Financial Advisors. No obligation, no strings. Just sound advice from our financial experts who are focused on you and your needs.

Other Products you may need

Tax Free Savings Account - With every home, new or established, comes with "up keep" costs. Start saving a little bit each month to stay ahead of any unexpected bills.

Total Access Home Equity - Provides financing for all your needs, including your home, all at once.