2.99 per cent lender revealed

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The lender providing the latest 2.99 per cent five-year fixed rate has been revealed and the product, no way resembles, BMO’s controversial “no friller” that captured media headlines two years ago.

“We typically do not talk about the lender but now that it is out there, yes, it is (Industrial Alliance),” said Ron Butler of Verico Butler Mortgage,  revealed in the comments section of MortgageBrokerNews.ca “Not a No-Frills, as some may think; just IA standard mortgage product 15/15 and standard penalty clauses.”

Butler kept the lender a secret until another anonymous commenter exposed IA as the backer. Several other commenters also assumed the rate could only be had with a buy down; an assumption Butler is calling incorrect.

And with a consumer base that, as a whole, is becoming increasingly more educated about mortgage product, Butler sees this move as a way to give customers what they want: A low interest rate.

“That's what so many mortgage brokers don't get: the rates are not a secret anymore and every time a mortgage broker talks about what is wrong about working for the lower commissions as we do every day, a consumer reads the post and crosses the mortgage broker who insists on higher commissions off their list of prospective firms to contact,” he said.

However, the approach is popular among all brokers, with some arguing a good rate is only part of the mortgage broker offering.

“If rate was all I was selling, my rate on my site would have already been changed last Friday when that rate was posted by I.A.,” Richard Kitts of The Mortgage Centre commented.  “I do offer the 2.99% fixed and 2.35% on the variable to my client; however, I ensure this is what they want first before offering something they may not even qualify for.”