Introducing VirtualWealth: An Easy Way to Invest Online

It’s the time that makes most homeowners cringe — your mortgage is up for renewal and you’re not sure if you should renew with your financial institution or move. Before you make your decision, here are a few things for you to consider.

Use this checklist to see if you need to shop around:

1. What is your current interest rate? Is this more than the interest rates being advertised right now? If yes, you may get a lower rate by moving your mortgage.

2. What kind of mortgage do you have? Is it a variable or fixed rate? Is it open or closed? Scroll down below for more information on variable and fixed rates, open and closed mortgages. If your employment status has changed or if you have moved jobs, you may need to look at how to better structure your mortgage to fit your needs.

3. What is the length of time you want to pay off your mortgage, also called the amortization period? If your income has increased, you may be able to pay a little more towards your mortgage. You can then bring down the total number of years left on your mortgage and save on interest costs.

4. How often are you paying your mortgage payment? Can you make them more often, like from monthly to bi-weekly? If yes, this will help you pay off your mortgage faster and decrease the amount of interest you pay.

5. Do you have some extra money that you can use to make a lump-sum payment? If yes, doing a lump-sum payment during your renewal will help decrease your loan amount and the amortization period of your mortgage. You will then be able to select a more favourable term on renewal.

6. Do you have any debt or other expenses that you want to combine with your mortgage payments? For example a credit card debt or home renovations. This will increase the amount you owe on your mortgage or the number of years left on your mortgage. But it may help you get rid of the high-interest charges you’re paying and save you money. You’ll have to qualify to refinance your mortgage if you’re taking this route.

7. Do you want to consider adding on insurance? Mortgage insurance often includes life insurance, critical illness insurance, disability insurance or loss of employment insurance. This additional coverage will help protect you in case of any unforeseen circumstances.

8. Are you happy with the service your financial institution is providing you? Are they attentive to your needs and work to come up with solutions that are best for you?

Review your current situation

It’s been a while since you last renewed. The first thing you should do is review your current situation as things have changed, including the state of the housing market. You should do this with an expert who can provide you with the best advice, like an Alterna Banking Advisor.

At Alterna, we’re up for looking at lower rates and making the new terms of the mortgage suit your needs. After all, it’s not about us; it’s about what works best for you. We want to give you the freedom to think about other things in your life. Like where you want to go on your next vacation or whether you can afford that cottage on that premium lakeside spot! Our banking advisor will review everything to provide you with open and transparent pricing. So, you'll always know what you're getting. They can even talk to you about some of our innovative products such as –

Multi-ownership Mortgage – you can buy a home with your parents, siblings or even your BFF.

Flexi-Mortgage – this is like a “ladder” where renewal dates are staggered. This gives you the security of a closed mortgage and the flexibility of an open one.

Let’s chat

Your mortgage is likely your biggest expense. So make sure you talk to an Alterna Banking Advisor about getting your best interest rate and savings! With terms and conditions that best suit your needs. The key is to talk to us a few months before your mortgage is up for renewal.

Variable Rate Mortgages

On a variable rate mortgage, your interest rate fluctuates with the prime rate. So, a variable rate mortgage is ideal when interest rates are dropping. If interest rates go up so will your costs of borrowing. The good news is, Alterna's variable rate closed mortgages have conversion options available.

Fixed-Rate Mortgages

With a fixed-rate mortgage, you are locked into a rate of interest for the term of your mortgage. This ensures you get the advantage of predictable payments.

Open Mortgages

Open mortgages allow you to prepay any amount of your mortgage at any time without a penalty.

Closed Mortgages

Closed mortgages have a prepayment limit that ranges from 15%-20% of the original loan amount. Alterna mortgages have a prepayment limit of 20%. This means you can pay 20% of the original principal balance of the mortgage per calendar year. If you elect to pay more than 20% within a single calendar year, a penalty will apply. The advantage of a closed mortgage is that it usually offers a lower interest rate than, lowering your cost of borrowing.

Saving and investing have become more convenient than ever before. Thanks to advances in technology, a simple online investing service, sometimes called “digital advice” or “robo-advice”, is now available to our members. It is VirtualWealth and, depending on your needs, it may be a service worth considering.

Here’s how it works.              

You spend a few minutes answering an online questionnaire to gather information about you, such as your savings goals and timeline. You are then presented with a recommendation for a portfolio of investments that best suits your needs.

Once you’ve opened and funded your account, your portfolio is managed automatically. This includes regularly rebalancing the investments to maintain the target asset allocation. Through the VirtualWealth website and mobile app, you can easily add funds to your account, and track the value of your portfolio as well as your progress towards your goal.

VirtualWealth also gives you the option of Responsible Investing portfolios, which incorporate environmental, social and governance considerations into the investment management process, to reduce risk and provide sustainable returns.

Who should consider digital advice?

Digital advice can be a good option if your investing goal is simple and straightforward, such as saving for a down payment on a house or for your kids’ education. And it’s well-suited to people who are just beginning to build their wealth: even when you’re starting out with a smaller amount to invest, you can have a well-diversified, professionally managed portfolio.

Advantages of digital advice?

The biggest advantage of digital advice services like VirtualWealth is that they are easy and convenient. You can invest in a well-diversified, professionally designed portfolio, without needing to spend any time researching or making buy and sell decisions.

Fees are quite low, so digital advice provides great value.

Another important benefit is that these services help reduce the temptation that investors sometimes feel to make decisions based on emotions. While market volatility is normal, it can lead people to become too pessimistic or too optimistic. When you’re investing, it’s usually best to stay focused on your long-term goal and ignore short-term market ups and downs. With digital advice, you delegate day-to-day investment decisions to professional managers, and your emotions are not part of the decision-making process.

Advantages of working with an advisor?

While digital advice is a good option for many, working directly with a financial professional makes sense in many cases.

Financial advisors provide great value if you have more assets to consider and you are dealing with more complex financial matters. This may involve scenario planning for retirement, issues around tax efficiency, estate planning, and insurance needs.

When you require more comprehensive financial planning, it’s best to work with a professional who knows you, knows your situation, and can answer your questions face-to-face or on the phone whenever you need.

A combination of digital and human advisors

If you prefer to work with an advisor but would also like to explore digital advice, we can now bring you the best of both worlds in a “hybrid” approach: the simplicity and convenience of digital advice combined with sophisticated financial planning from your advisor. You can have an account with VirtualWealth, and work with one of our advisors who can monitor your progress and check in with you on a regular basis. Our advisors will provide a comprehensive financial plan that includes VirtualWealth, and they will help you monitor and update your plan whenever needed. Together, we can help you build and protect your wealth, and ensure that your financial planning needs are taken care of.

Credit union-owned with members' best interest in mind 

VirtualWealth is powered by the same national organization behind Qtrade Investor, one of Canada’s top-ranked online brokers based on ratings by The Globe and Mail, Surviscor and MoneySense. These services are collectively owned by Canada’s credit union network.

When it comes to wealth services, we always make decisions in the best interest of our members and we’re committed to improving your financial well-being.

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Mortgage renewal checklist

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VirtualWealth is powered by Aviso Wealth, one of Canada’s leading independent financial services providers. Aviso oversees billions in assets under administration and management. It is owned by the provincial credit union Centrals, The Co-operators/CUMIS and Desjardins.

VirtualWealth is a trade name of Credential Qtrade Securities Inc., Member of the Canadian Investor Protection Fund.