If you thought mortgage rates could not go any lower, you were wrong.
Investors Group is rocking the mortgage world with what appears to be the
deepest discount in Canadian history on a floating rate loan, offering a deal
that takes an effective mortgage rate down to 1.99%.
The company is now offering 101 basis points or 1.01 percentage points off
its prime rate of 3% for a variable rate mortgage. Consumers can get the deal
for a 36-month term which is shorter than the length offered by some of the
major banks on the deep discounted five-year fixed rate mortgage which has
dropped to around 3% — a controversial level that once drew the wrath of the
department of finance.
We haven’t seen a rate like this
The offer from Investors Group is not available from brokers and is coming
from the company’s own sources, designed to make a major splash in the
“They could have priced this at prime minus 80 and beat everybody in Canada.
Obviously, they want to get people’s attention here,” said Mr. McLister, who is
also editor of Canadian Mortgage Trends.
Peter Veselinovich, vice-president of banking and mortgages with Investors,
said his financial institution was able to set aside a block of funding to be
able to offer the cut rate deal.
“This [deal] will be driven by what the appetite is in the marketplace. It’s
a limited time offer, it may be there 90 or 120 days or it may be there for 30,”
said Mr. Veselinovich, whose company quietly brought in the cut-rate product
Monday to bring in new customers for its other offerings. “It’s kind of the best
kept secret in the marketplace.”
There are some conditions to the mortgage, namely you cannot break it without
selling your home. Nevertheless, the loan does allow consumers to double up
monthly payments and pay a lump sum of 15% of the mortgage every year.
The latest salvo in the mortgage rate wars comes in the aftermath of former
finance minister Jim Flaherty’s death which happened shortly after he stepped
down as finance minister.
Mr. Flaherty had intervened in the market to discourage banks from lowering
their mortgage rates below 3% on five-year fixed terms, out of fear it would
inflate the housing market.
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