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The Desjardins Group is a leading financial cooperative and credit union in North America, founded by Alphonse Desjardins in 1900 in Lévis, Quebec.
Despite still being headquartered in Lévis, most of Desjardins’ executive management is based in Montreal, with offices across Quebec and around the globe. It currently boasts 58,774 employees and 2,456 directors, who are responsible for its 300 local branches and 1,000 points of service. Desjardins serves over 7.5 million members and clients, most of whom are located in Quebec and Ontario.
Aside from banking, Desjardins also provides products like insurance, capital market services, wealth management and venture capital funds.
In addition, it’s the only financial institution with a presence in 121 towns and villages around the world. In fact, it’s become active in at least 30 developing countries, helping them strengthen their economies.
Fun fact: The officially named ‘Desjardins Bank’ is the US subsidiary of the Desjardins Group – first opened in 1992 in Florida.
Like many other financial institutions, Desjardins offers several mortgage options for home buyers, including:
Variable rates tend to fluctuate with the prime rate, making them somewhat unstable. That said, it’s a good option if you’re certain that interest rates will go down during your mortgage term, because your mortgage rate is likely to follow suit.
On the other hand, rates can also go up – by a significant amount. For instance, between March 2022 and January 2023, the national prime rate went from as low as 2.45% to as high as 6.70%, and Desjardins’ variable rates followed.
Despite such fluctuations, monthly variable-rate mortgage payments remain the same, as they are rebalanced to account for the difference (if the rates go up, for example, more of your money will go towards the rate and less towards the principal).
Closed variable-rate mortgages are available with either reduced or protected payments. The reduced option comes on a five-year term, with a lower mortgage rate that will fluctuate along with the prime rate. The protected payments also come on a five-year term, but their mortgage rate is higher, and it’s protected by a maximum rate, set before you take the mortgage. Finally, there’s the open regular variable-rate payment option, which comes either on a two-year or one-year term, typically with the highest rate of all three.
The key takeaway here is that a variable-rate mortgage will require you to constantly keep an eye on the prime rate. So, if you’re not financially savvy, this may not work for you.
Fixed-rate mortgages are the exact opposite of variable-rate mortgages. By going with this, you’ll have the guarantee that no matter what happens to the prime rate, your mortgage rate will remain the same. As a result, you’ll have a much easier time planning how your mortgage is paid out, since you won’t have to constantly monitor the prime rate.
If you go for a closed fixed-rate mortgage, your term can be as short as six months and as high as ten years. The five-year term is the most popular one, as it allows you to make consistent payments for a period that is neither too long nor too short.
You can also go for the open fixed-rate mortgage, which comes on either a six-month or one-year term. This option is less desirable as the rates tend to be very high.
Home equity line of credit, or HELOC, is a type of mortgage product that lets you access the equity you have in your home. What is equity? It’s the difference between the value of your home and what you owe on your mortgage. For instance, if the value of your home is $600,000 and you owe $350,000, then your equity is $250,000. Equity grows as you pay off your mortgage and as your home’s value increases over time.
In Canada, you can utilize up to 65% of your home value once you accumulate at least 20% equity – either via a down payment or a combination of both your down payment and regular mortgage payments.
You can use your HELOC money to either pay off a portion of your mortgage (65% of its purchase price), pay for home renovations or consolidate debt. The advantage of this is that HELOC interest rates are usually lower than they are for other types of credit (such as credit cards). They are also variable as opposed to fixed.
Your credit limit will be decided by you and your lender. However, it cannot be higher than 65% of your equity. Given that your credit limit can be very high, be careful when deciding whether HELOC is right for you. If you have bad spending habits, for instance, you can easily accumulate more debt than you can pay off, which can cost you your home.
If you’re looking to secure financing to purchase a residential rental property, Desjardins can help. It will evaluate both the quality and value of the building you’re buying to determine your loan amount, and if necessary, allow you to use your other real estate properties as collateral. Loan terms range from one to ten years, and you can opt for either a fixed, variable or combined loan. In addition, with Desjardins’ multi-project option, you can re-borrow all or a portion of the principal repaid, if you need that extra flexibility.
With a hybrid mortgage at Desjardins, you can split your mortgage into several tranches, which you can then customize to your liking. Rates, terms and payment frequencies can all be adjusted for each individual tranche. This is a good idea if you’re planning to have several members of your household pay their share of the mortgage with you. Since each tranche is customizable, everyone can pay their share on their own terms.
In addition to various mortgage products, Desjardins offers several features that can further enhance your home-buying experience.
Desjardins mortgage protection insurance does exactly what you’d expect it to do – it protects your mortgage. Should you pass away or become disabled, the insurance will pay some or all of your mortgage, depending on the coverage. This can act as a stand-in for your life insurance (if you don’t qualify for one) or an enhancement to your existing life insurance. As is the case with other insurances, your premium will be influenced by the coverage you select as well as factors such as age and mortgage size.
If you intend to purchase or build a ‘green home’ – a house that’s both sustainable and energy-saving – you can receive a $2,000 cashback reward, along with a free monthly plan for one year and free home assistance when taking out loan insurance.
To determine whether your home qualifies as ‘green,’ Desjardins will get it certified through one of the following:
Aside from netting you some extra cash, your green home would also save you money on energy bills and reduce your carbon footprint on the planet.
If you decide to sell your home before your mortgage is paid off, you'll likely have to pay a penalty for breaking your mortgage. At Desjardins, you can avoid this by receiving a full prepayment penalty refund when applying for another mortgage within 90 days.
The caveat is that your terms for the new mortgage have to be the same as for the previous one and the amount either equal or greater than the one preceding it. If your mortgage amount is smaller, then you’ll get a partial refund instead.
If you’d like to pay off your mortgage faster, Desjardins lets you do the following:
Desjardins’ advertised special offer 5-year fixed and variable rates
| Date | 5-yr fixed | Date | 5-yr variable |
|---|---|---|---|
| Mar 31 2023 | 5.54% | Mar 31 2023 | 6.50% |
| Jan 27 2023 | 5.69% | Jan 27 2023 | 6.70% |
| Oct 21 2022 | 5.59% | Dec 9 2022 | 6.45% |
| Oct 14 2022 | 5.54% | Oct 28 2022 | 5.75% |
| Oct 7 2022 | 5.49% | Oct 21 2022 | 5.45% |
| Aug 5 2022 | 5.39% | Sep 23 2022 | 5.20% |
| Jul 22 2022 | 5.49% | Sep 9 2022 | 5.15% |
| Jun 24 2022 | 5.24% | Jul 15 2022 | 4.70% |
| Jun 17 2022 | 5.19% | Jun 10 2022 | 3.70% |
| Jun 10 2022 | 4.89% | May 20 2022 | 2.75% |
| May 27 2022 | 4.59% | ||
| May 20 2022 | 4.54% |
Both five-year fixed and five-year variable rates saw a significant increase between 2022 and 2023. As expected, the variable rates were impacted much more severely than the fixed ones, going from 2.75% in May 2022 to 6.70% in January 2023. Fixed rates went from 4.54% in May 2022 to 5.54% in March 2023.
The reason for such a drastic increase is the Bank of Canada’s continual battle with inflation. To offset inflation, the prime rate went from 2.45% in early 2022 to 6.70% in early 2023. Given that variable rates tend to follow the prime rate, their drastic increase is not surprising. As of June 2023, the prime rate is poised to go up 0.25% (or 25 basis points) to 6.95%. There is currently no consensus on whether the rate will go up again in the coming months or hold.
If you’d like to apply for a Desjardins mortgage, you have three options:
Desjardins is an A lender in Canada.
What separates A lenders from B lenders is government regulation. A lenders are regulated – either on the federal level (if they are a chartered bank) or provincial level (if they are a credit union or caisse populaires). Furthermore, A lenders usually cater to customers with good credit scores and reliable income streams – the so-called ‘prime borrowers.’ B lenders, however, are not regulated – though they do have to follow certain regulations. They also tend to lend money to people with subpar credit scores and uneven or low income streams.
Desjardins is government-regulated, which is what qualifies it as an A lender. You also need a decent credit score and steady income to qualify for its loans.
You can find rates for Desjardins and other Canadian banks online. You can then compile them in a spreadsheet and compare them side by side.
Your second option is to get in touch with a mortgage broker, with whom you can work to secure the lowest mortgage rate available.
The easiest option by far, however, is to use a comparison site like RATESDOTCA to look up available rates in a matter of seconds (for free).
Since rates can fluctuate wildly, there is no way to answer this definitively. However, if you’d like to see how Desjardins’ rates compare to those of other financial institutions, consider using a comparison site like RATESDOTCA. In just a few clicks, you can identify the best available mortgage rate from 50+ lenders across Canada, including Desjardins.
Taras has over nine years of content marketing experience across multiple industries in B2B and B2C spaces. He has produced thought leadership content for organizations like Constellation Software, Facebook and Yellow Pages as well as outlets like Huffington Post and MSN Canada.
He graduated from York University with a Bachelor of Arts degree and studied Technical Communication at Seneca College.
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