Credit Union Mortgages: Benefits You May Be Missing

Only considered big banks for your mortgage? You might be missing out on significant savings and flexibility. Credit unions offer unique benefits that can save you money and provide options that traditional banks don't.

What Makes Credit Unions Different?

Credit unions are member-owned financial cooperatives:

Not-for-profit:
Profits go to members, not shareholders.

Member voting:
You have a say in governance.

Community focused:
Often serve specific regions or groups.

Relationship-based:
Decisions made locally, not by algorithm.

Key Credit Union Mortgage Benefits

1. More Flexible Underwriting

Credit unions often look beyond the numbers:

• Consider your full financial picture
• May approve files big banks decline
• More willing to hear explanations for credit issues

2. Stress Test Flexibility

Some credit unions (provincially regulated) may offer:

• Reduced stress test application
• Qualification at actual rate (not +2%)
• Bigger borrowing power for same income

Note: This varies by province and credit union.

3. Competitive Rates

Credit unions don't have:

• Large marketing budgets to recoup
• Shareholder profit expectations
• Big bank overhead

Savings often passed to members through rates.

4. Profit Sharing

Many credit unions distribute profits as:

• Patronage dividends
• Rate bonuses
• Fee rebates

You might get money back at year-end.

Where Credit Unions May Have Limitations

Geographic restrictions:
Many credit unions serve specific areas or member groups.

Smaller product selection:
May not have every product type a big bank offers.

Technology:
Some have less sophisticated online banking (improving rapidly).

Branch network:
Fewer locations than big banks.

Major Canadian Credit Unions

British Columbia:

• Vancity
• Coast Capital

Alberta:

• Servus Credit Union
• ATB Financial (technically a Crown corporation)

Ontario:

• Meridian
• Alterna Savings

Quebec:

• Desjardins (largest in Canada)

Other provinces:
Many regional credit unions with excellent products.

The Stress Test Advantage (Where Available)

Some provincially regulated credit unions aren't bound by federal B-20 guidelines:

Federal lenders (banks, monolines):
Must qualify you at stress test rate.

Some provincial credit unions:
May qualify at actual contract rate.

Difference example:

• Income: $100,000
• With stress test: Qualify for ~$450,000
• Without stress test: Qualify for ~$525,000

This can be the difference between affording your home or not. Learn more about the stress test.

Who Should Consider Credit Unions?

Good fit if:

• You value local, member-owned banking
• Your file needs human judgment, not just algorithms
• You want stress test flexibility (where available)
• You appreciate profit sharing
• You're in a region with strong credit union options

May not be ideal if:

• You need extensive branch network
• You travel frequently and need nationwide access
• You want the latest fintech features

Working With a Mortgage Broker

The best way to access credit union mortgages:

• Brokers work with credit unions directly
• Compare credit union rates vs banks and monolines
• Match your situation to the best lender type
• Navigate membership requirements

Not all credit unions work with brokers—some are direct-only.

FAQ

Q: Do I have to become a member to get a credit union mortgage?
A: Usually yes. Membership typically costs $5-25 and gives you ownership rights.

Q: Are credit union mortgages insured by CMHC?
A: Yes, if you put less than 20% down. The mortgage insurance works the same way.

Q: Can I get a HELOC from a credit union?
A: Most credit unions offer HELOCs, often with competitive rates.

Q: Are credit union deposits safe?
A: Yes. Each province has deposit insurance (similar to CDIC for banks) protecting your money.

Q: Do credit unions offer pre-approvals and rate holds?
A: Yes, credit unions offer standard pre-approval and rate hold services.

What's Next

Credit unions are often overlooked by home buyers focused on big bank names. When comparing your options, include credit unions alongside monoline lenders and banks to find the best overall package.