First National Financial Mortgage Review 2023

First National Financial at a glance

First National Financial is a non-bank mortgage lender providing residential, commercial and sub-prime mortgages via a network of mortgage brokers.

First National Financial full review

Established in 1988, First National Financial is one of the country’s largest non-bank lenders — sometimes referred to as B lenders — managing over $100 billion in mortgages. 

First National Financial is headquartered in Toronto but it has several offices across Canada and provides mortgages throughout the country (though their subprime mortgages — known as Excalibur loans — are only available in a few provinces/regions). 

Though First National Financial specializes in both commercial and residential mortgages, it does not work directly with consumers. Instead, interested borrowers must use a mortgage broker to apply for a mortgage from First National Financial. 

The company has a wide variety of mortgage types, including loans for clients seeking to finance commercial real estate. 

First National Financial offers commercial mortgages for senior homes, industrial, multi-family dwellings, retail, storage facilities, student housing, mixed use and even land development. 

For residential borrowers, First National offers fixed, variable, 6-month open, conventional and insured mortgages, as well as mortgages for investment properties and for those who want to roll the cost of home improvement into their mortgage. 

For eligible Ontario homeowners, First National Financial also has a secured credit card that works much like a HELOC — the credit limit is based on your available home equity.

Finally, First National has some complementary mortgage programs. One is the no-cost First National home warranty. The policy provides up to $10,000 for eligible repairs for your first 12 months of home ownership. You can renew it after the first year for a fee. They also offer mortgage protection insurance (for a fee) that would help you pay off a mortgage in the event of an unexpected death or a severe accident or illness that prevents you from working.

How to choose the right mortgage lender

Selecting the right mortgage provider is a big decision. A mortgage is a large debt and you want to make sure that you’re getting the best deal possible. You’ll need to do some research, make a list of what’s important to you, and spend some comparing offers from the different types of providers.

1. Decide your budget. It’s important to have an idea of how much mortgage you can comfortably afford, before talking with lenders. They may offer you more than you want to spend; it’s important to be ready for that conversation.
2. Understand the different types of lenders: Mortgage providers include banks, credit unions, brokers like True North Mortgage, alternative lenders, and private lenders. Each has its pros and cons.
3. Compare offers from three different lenders: To ensure you have a good idea of what’s out there, consider seeking mortgage pre-approval from a big bank, a broker and one other type of alternative lender.
4. Don’t focus too much on rates. The interest rate is just one part of the mortgage equation. Yes, you want the most competitive rate possible, but it’s also important to weigh the reputation of the lender, the quality of customer service they provide, the types of loans they offer, the fees they charge, and the flexibility of terms they may offer.

» LEARN MORE: Read our guide to choosing a mortgage lender

How First National Financial calculates your mortgage payment

Like most mortgage brokers and lenders, True North Mortgage lending partners will consider the following when estimating what the regular payment might be for your future mortgage:

• Home price: the total amount you agree to pay for a home.
• Down payment: the total amount you’ll pay upfront toward a home purchase.
• Amortization period: the number of years over which you’ll repay your mortgage.
• Mortgage term: the length of the contract you’ll have with your mortgage lender.
• Payment frequency: how often you’ll make a mortgage payment.
• Mortgage interest rate: the fee you’ll pay to borrow money from the lender; expressed as a percentage of the loan amount.
• Property taxes or title transfer fee: an annual fee based on your property value.
• Mortgage default insurance: an extra cost you’ll pay if your down payment is less than 20%.

Example:

• Home price: $650,000
• Down payment: $58,500 (9%)
• Amortization period: 25 years
• Mortgage term: 5 years
• Payment frequency: Monthly
• Mortgage interest rate: 5.5%
• Mortgage insurance: $23,660

TOTAL MORTGAGE: $615,150
MONTHLY MORTGAGE PAYMENT: $3,778

» MORE: Use our mortgage payment calculator to compare different loan scenarios

First National Financial feature overview

Mortgage variety

First National Financial offers a wider variety of commercial mortgages than other banks and brokers, including mortgages for multi-family buildings, senior and student housing and more. 

Its residential mortgage selection includes fixed and variable mortgages, as well as a revolving credit line secured by your home’s equity. 

First National Financial also offers a first mortgage that can accommodate the cost of planned home improvements, as well as mortgages for second homes or vacation properties. First National can also provide subprime mortgages to those with bad credit and mortgages for self employed people.

Ease of application

You can’t get pre-approved or apply directly to First National for a mortgage. First National products are only offered through mortgage brokers who have chosen to partner with the company. 

That being said, you can fill out a form on the lender’s website and if a qualified broker exists in your area, they will contact you directly. The lender also makes it possible to ask questions, via a form on the site.

Loan amounts and terms

Based information available on First National Financial’s website, it isn’t possible to confirm an absolute minimum or maximum loan amount. Certain types of residential mortgages, however, appeared to be capped at a specific loan to value ratio. 

Mortgage terms are available from six months to 10 years for closed, fixed rates (for conventional and insured mortgages), and at five years for conventional and insured variable rate mortgages. 

For Excalibur mortgages, terms are contingent on the borrower’s credit rating and appear to max out at three years.

Mortgage rate transparency

First National’s website lists sample mortgage rates for both prime and subprime mortgage offerings. The company’s rate table shows rates for one-, two-, three-, four-, five-, seven- and 10-year fixed-rate mortgages, as well as five-year adjustable rates for loans of varying LTVs, and one-, two- and three-year rates for the Excalibur loan.

It’s particularly useful to have posted rates for Excalibur loans, as some lenders choose to advertise only the best rates to attract clients and won’t show rates for people with less-than-ideal finances, which could be significantly higher. 

The company website notes that rates can change without notice and that the best way to ensure you get the most accurate rates on a particular day is to contact them.

» MORE: Learn about fixed vs variable-rate mortgages

Rate types

First National offers mortgages with both fixed (conventional and insured) and variable (conventional and insured) rates, as well as a 6-month open fixed-rate mortgage.

Mortgage fees

Tucked into the fine print of its “find a mortgage broker” form, First National states that the broker may be remunerated directly or indirectly from First National, i.e. broker fees are not charged to borrowers. 

Additionally, the company claims there is no fee to move your current mortgage to First National financial, and that it will cover the costs of switching (such as appraisal and legal fees) up to $3,000. 

First National offers several fee-free prepayment options for eligible mortgages, including:

• An annual lump-sum payment of an additional 15%.
• An annual increase of 15%.
• Pay two mortgage installments at one time (double up payment).
• Pay 13 months of payments over a period of 12 months.

If you exceed these pre-payment allowances, you will be charged for any additional prepayments. Depending on your mortgage type, the prepayment penalty is equivalent to three months’ interest on the prepaid amount or the prepayment penalty is calculated as the greater of three months’ interest on the prepaid amount or an Interest Rate Differential (IRD) amount.

Security and safety

First National will likely gain access to your personal and financial information through a third-party, like a broker. However, the company notes that it takes your privacy seriously and utilizes physical, technological and organization controls whenever possible. The company’s Privacy Policy page states that you have the option of reaching out to First National’s Chief Privacy Officer with any concerns, and provides that contact information.

First National Financial mortgage eligibility requirements

To qualify for a prime mortgage with First National Financial, as with any lender or brokerage, you’ll need to meet certain eligibility requirements. These include:

• Minimum credit score: Typically 680, but lower-score options exist.
• Credit history: Established accounts in good standing, no recent negative marks.
• Income: Amount of income needed will vary depending on how much you want to borrow.
• Down payment amount: At least 5% for a home under $500,000. For homes between $500,000 and $999,999, you need 5% of the first $500,000 and 10% of the amount above $500,000.
• Debt service ratios: Your gross debt service ratio must not exceed 39%; your total debt service ratio must not exceed 44%.
• Type of employment and employment history: You must be able to demonstrate at least two years of consistent employment.

For an Excalibur mortgage from First National Financial, the qualifications are different. Depending on your situation (whether or not you’re applying as self-employed), you may have to have had a credit history that is at least two years old and a strong downpayment. It’s unclear what the minimum credit score is for an Excalibur mortgage, but according to ‘recent closings’ listed on the company’s website, scores as low as 580 may be accepted.

How to apply for a mortgage with First National Financial

You must go through a broker to get a mortgage with First National, so there is no application information on the company’s website.

However, you can begin the process by filling out a “Find a Broker” form on the website, providing personal information and contact details. 

Expect to provide information and documentation to your mortgage broker, who will need to verify your income, credit score, savings, debt load, cost of the property you’re interested in and the amount of your down payment.

Alternatives to First National Financial

If First National Financial is not turning out to be a good option for you, you may find more customized mortgage rates with other lenders and brokers in Canada.

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