League Financial Partners is building the tallest tower on Vancouver Island at Colwood, but it is plans for a new kind of mortgage for condo buyers that's raised eyebrows.
League Financial CEO Adam Gant said the company's equity mortgage program will offer customers a larger down payment in order to avoid insurance premiums and reduce their debt.
"We've created a whole new kind of mortgage," he said. "The equity mortgage is the next revolution in home-purchase financing."
Homebuyers will need 10 per cent of the purchasing price, but League Financial will then loan them an additional 10 to 25 per cent in order to qualify for a 65 to 80 per cent conventional mortgage.
The mortgage program is designed to allow buyers to avoid mortgage insurance premiums from the Canadian Mortgage and Housing Corp. (CMHC) and qualifies them for a 30-year amortization period.
New mortgage rules in Canada, announced in June, reduced the amortization period from 30 to 25 years for government-insured mortgages.
Gant said League's equity mortgage results in monthly payments up to 40 per cent lower than a CMHC-insured 25-year mortgage because no payment of interest or principle is required.
Phase 1 construction, mostly retail space, is well underway and will be built out over the next five years at an estimated value of about $250 million.
Housing will include a 27-storey residential tower of 208 condos with prices starting at $270,000.
from Western Investor October 2012
