If you’re in the market for a mortgage, either to buy a new home or to refinance your existing mortgage, you might be considering a variable rate mortgage. I mean, why not risk higher payments later for lower payments now?
And that’s how it should usually work, but with mortgage rates being as low as they have been in recent years, it’s actually possible to get a 5 year fixed mortgage for a lower rate than a 5 year variable mortgage. And that’s true for Alterna mortgages as well.
Alterna closed variable rate mortgage features
Let’s see what Alterna variable rate mortgages have to offer.
Why You Want It
Flexible prepayment options + Fully digital mortgage process.
Special Features
- Covers up to $800 in closing costs
Provinces
AB, BC, MA, NB, NL, NS, NT, NU, ON, PE, SA, YU
Mortgage Rates
Variable Closed
3 Years
4.5%
5 Years
4.4%
Features
Rate Type
Variable Closed
Pre-approval
Rate Guarantee (days)
120
Bank Prime Rate
4.95%
# Of Prepayments Allowed Per Year
See Issuer for Details
% Of Prepayment Allowed
2,000%
# Of Payment Increases Allowed Per Year
See Issuer for Details
Max Payment Increase Allowed
20%
Promotion Available
N/A
Promotion End Date
N/A
Alterna closed variable rate mortgage rating: 3.0 stars
While Alterna’s fixed rate mortgages have very competitive rates, the same cannot be said for their variable rate mortgages. And their offerings are limited, with only 3 year and 5 year closed variable rate mortgages available.
Unfortunately, it appears that Alterna Bank simply hasn't put much effort into its variable rate mortgage offerings. So if you're specifically looking for this type of mortgage, you'll want to consider other providers.
Rating methodology
To calculate our Genius Ratings, we compare the features of the account or product in question with other similar products in Canada. We give each feature a score out of 5 based on that comparison. Once we’ve rated all the features, we run them through our proprietary algorithm to produce a final rating out of 5.
Learn more about our rating methodology.
The pros of an Alterna closed variable rate mortgage
The good news about Alterna variable rate mortgages is pretty thin.
Pros
Flexible prepayment options
All Alterna mortgages come with flexible prepayment options that allow you to pay up to 20% of the original balance of your mortgage per year. You can make as many payments as you want, of any size you want, as long as you don't go over that 20% max. This can save you a pile of money on interest payments over time.
Fully digital mortgage experience
While Alterna has a small number of physical branches scattered throughout Ontario, for most Canadians, their Alterna banking experience will be entirely online. This includes applying, being approved for, and receiving an Alterna mortgage. If you’re comfortable with this sort of hands-off online experience, it can be hugely convenient. Some people will still prefer some face-to-face hand holding, however, in which case an Alterna mortgage might not be the best choice.
The cons of an Alterna closed variable rate mortgage
And the drawbacks are fairly significant.
Cons
Higher than average rates
Even compared to the big banks, Alterna’s variable mortgage rates are higher than average. Most people who look at variable rate mortgages are hoping to save some money over time, so this is obviously a major strike against Alterna.
Sub-par promo
Few banks offer mortgage promotions that are really worth factoring into your decision, and Alterna bank mortgage promo is no different. Right now they’re offering up to $800 to cover your closing costs, which is a lovely gesture, but doesn’t really add up to much in the long run.
Alterna closed variable rate mortgage alternatives
How does the Alterna mortgage measure up to some alternatives? Let’s take a look.
 |  |  |  | |
|---|---|---|---|---|
| Account | Alterna Closed Variable Rate Mortgage | Neo Mortgage | nesto | Scotiabank Open Variable Mortgage |
| Genius Rating | ||||
| Why You Want It | Flexible prepayment options + Fully digital mortgage process. | Better rates than the big banks + Apply and get pre-approved in under 5 minutes. | Get the lowest rate guaranteed + 150 day rate lock | Flexible prepay options + Get mortgage protection with 4 coverage types. |
| Mortgage Rates | Variable Closed
| Fixed Closed
| Fixed Closed
| Variable (Open)
|
| Rate Type | Variable Closed | Fixed Closed | Fixed Closed | Variable Open |
| Pre-approval | | | | |
| Rate Guarantee (days) | 120 | 120 | 150 | 120 |
| Bank Prime Rate | 4.95% | 4.45% | 4.7% | 4.45% |
| # Of Prepayments Allowed Per Year | See Issuer for Details | 1 | See Issuer for Details | See Issuer for Details |
Show More | ||||
| See rates & details See more Alterna products Compare | See rates & details See more Neo Financial products Compare | See rates & details See more nesto products Compare | Learn More See more Scotiabank products Compare |
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FAQ
Is Alterna Bank a credit union?
Alterna Bank is owned by Alterna Savings, a credit union in Ontario. Alterna Bank offers everyday banking services, investment products, business accounts, and mortgages. Read more about Alterna variable rate mortgages.
Does Alterna Bank have the best variable mortgage rates?
While Alterna bank fixed rate mortgages are very competitive, the same cannot be said for their variable rate mortgage offerings. Their rates are higher than average, and, at the time of writing this article, even higher than their own fixed rate mortgages.
How much will an Alterna mortgage cost?
If you’re wondering how much an Alterna bank mortgage (or any other mortgage) will cost, you can use our handy free mortgage calculator to play with some of the numbers.
Editorial Disclaimer: The content here reflects the author's opinion alone, and is not endorsed or sponsored by a bank, credit card issuer, rewards program or other entity. For complete and updated product information please visit the product issuer's website.
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