Buying a residence, whether a house or a condo, is often the most important investment of a lifetime. However, along with transportation and food, housing is one of the three largest household expenses. With interest rates on the rise since 2022, mortgage payments represent an even larger share of the budget. A better mortgage rate will not only help you save more in the long term, it will also make it easier to balance your budget in the short and medium term .
With this in mind, Neo Mortgage is striving to establish itself in the Canadian mortgage market. To achieve this, technology is used to make the mortgage experience more efficient and accessible. Neo allows you to obtain the best mortgage rate with an online application process on their secure platform. If required, you can get advice from their team of mortgage specialists at every stage of the process.
In this article, find out how to apply for a mortgage online with Neo and get pre-qualified in just a few minutes.
Neo Financial is a Winnipeg-based Canadian financial institution specializing in savings and credit products. Neo is an alternative to the big five Canadian banks: BMO, CIBC, RBC, Scotia and TD.
It’s 100% digital, and includes rewards on purchases with their no-fee credit cards, savings with their high-interest savings account, and mortgages with their mortgage solutions.
Neo offers a wide range of products and services, including :
In this article, we focus solely on Neo Mortgage To find out more about Neo’s other services, read this review: Neo Financial: a case study
To apply for a mortgage with Neo, you must be a resident of Canada, have Canadian photo identification and be of the age of majority in your province.
Unfortunately, Neo Mortgage is not yet available in Quebec, Nunavut, Yukon or the Northwest Territories.
Neo Mortgage offers mortgages for :
As mentioned earlier, Neo gives you access to the best mortgage rate. At the time of writing, Neo’s best mortgage rate for a 5-year fixed-rate loan (closed) is 5.19%. Among the five largest Canadian banks, the best rate is 6.84%. So there’s a big difference…
Applying for a mortgage with Neo is quick and easy. In fact, you can get pre-qualified in just a few minutes.
To speed up the application process, you should have the following information on hand:
To start your online application, select the option that best suits your needs: property purchase, property renewal or property refinancing.
Unfortunately, Neo’s digital platform is not available in French.
To complete a mortgage application for the purchase of a home, you must first select “I want to buy a home”.
Then answer the questions on the online form in less than two minutes:
These questions include the purchase price of the new property, the amount of the down payment, your credit score and your identifying information (first name, last name, e-mail address and cell phone number).
Finally, you get the lowest rate on the market for a new mortgage based on your situation. Neo displays the best fixed and variable rates available.
If you have any questions, you can talk to one of Neo’s mortgage specialists. Unfortunately, Neo Mortgage is not available in French or in Quebec. Finally, if you wish to go ahead with one of the offers, you can click on “Lock in the rate” and fill in the form.
To complete a mortgage renewal application, you must first select “I want to renew a mortgage”.
These questions include the value of the property, the remaining balance on your mortgage, whether or not your mortgage is insured (e.g. with CMHC) and your credit score.
Ultimately, you get the lowest rate on the market for a mortgage renewal, based on your personal and financial situation. As mentioned above, you can speak with one of Neo’s mortgage specialists if you have any questions or would like to discuss your options.
To request a mortgage refinance, you must first select “I want to refinance a mortgage”.
These questions include, among others, the value of the new property, the remaining balance on your mortgage, the amount of money you’d like to withdraw from your property and your credit score.
Finally, you are presented with Neo’s options based on your personal and financial situation. Here too, you can speak with Neo’s team of mortgage specialists if you have any questions or would like to discuss the options available.
In short, Neo Mortgage is making its mark on the Canadian mortgage market by leveraging technology, among other things. What’s more, the mortgage experience is efficient and accessible thanks to their secure digital platform. This enables Neo to offer a better mortgage rate than the major Canadian banks.
For residents of Quebec and provinces/territories where Neo Mortgage is not yet available, you may be interested in nesto, which offers the same services. Here’s our guide to this product:
Here are the answers to the most frequently asked questions about Neo Mortgage.
Neo Mortgage is one of the services offered by Neo Financial, a Canadian financial institution based in Winnipeg. This service gives you access to the best mortgage rate through an online application process on their secure digital platform. Neo Mortgage offers mortgages for home purchases, mortgage renewals and mortgage refinancing.
The interest rate on a mortgage, called the mortgage rate, is the interest rate (e.g. 5.19%) you pay on the balance of your mortgage. The mortgage interest rate is determined by several factors. In particular, credit score, income and loan characteristics (type of loan, loan term, ability to prepay without penalty, etc.).
Mortgage rates are constantly changing, depending on a number of factors. For example, the type of property (house, condo, plex), the purchase price of the new property and the amount of the downpayment (if applicable), the value of the current property and the remaining balance on your mortgage (if applicable), your credit scorewhether your mortgage is insured or not, etc. Currently, Neo’s best mortgage rate is 5.19% for a 5-year fixed-rate loan (closed).
With a variable-rate mortgage, the interest rate varies according to the key interest rate. Over the long term, a variable-rate mortgage is generally more advantageous than a fixed-rate mortgage. However, borrowers must have the capacity to meet mortgage payments that may increase. Conversely, with a fixed-rate mortgage, the interest rate remains the same for the duration of the mortgage (e.g. 5 years). It provides predictability and stability to borrowers’ budgets. Find out more: Should you get a fixed or variable mortgage in Canada?
The term of a mortgage is the length of time you have committed to a mortgage product with a lender. It is not the length of time required to repay the entire mortgage. Mortgage terms in Canada generally range from 1 to 10 years, but shorter terms are also available. The most common mortgage term is 5 years. Tip: when comparing mortgage offers, be sure to compare mortgages with the same term.
The amortization period of a mortgage is the time required to repay the entire mortgage. In Canada, the amortization period for a mortgage is generally 25 years. But you can opt for a shorter or longer period, depending on your needs.
Interest rates and mortgage rates rose very rapidly in 2022 and 2023. With inflation on the decline and on the verge of returning to the Bank of Canada’s target range, mortgage rates could fall in 2024. But it’s virtually impossible to anticipate the long-awaited drop(s), when and how much. In the event of a recession, rate cuts could come quickly. But if inflation picks up, interest rates could be raised again.
A mortgage lender is a financial institution that offers mortgage products directly to borrowers. Offers are generally limited to the mortgage products of the financial institution in question. A mortgage broker, on the other hand, is an intermediary between a borrower and a mortgage lender. He negotiates the best mortgage for a customer by comparing offers from several lenders.
You can start comparing mortgage offers several months before you renew your mortgage. Whether you use the services of a mortgage lender or a mortgage broker, you can lock in your mortgage rate for 90 to 120 days (3 to 4 months). A mortgage rate lock locks in an interest rate for a pre-determined period. If interest rates rise during this period, you keep the rate you’ve locked in. Conversely, if interest rates fall, you may be able to obtain a lower rate.
To estimate mortgage payments, you can use a mortgage calculator. For example, the Mortgage Calculator from the Financial Consumer Agency of Canada (FCAC). This mortgage calculator not only helps you determine your mortgage payments, but also estimates how much money and how many years you can save by making lump-sum payments).
To pay off your mortgage faster, there are several options, including making additional payments (e.g., increasing your regular payments or making a lump-sum payment) and choosing an accelerated mortgage payment option (e.g., making weekly or bi-weekly payments instead of monthly).
Savings are here:
