A new 2.99% comes to town

A new 2.99% comes to town

A new 2.99% comes to town

A top online-lead-generation brokerage is now hawking its own offer of 2.99 on a five-year fixed – becoming what it bills as “the first Canadian mortgage broker to break the 3 per cent threshold."

"Once again, we are applying our customer-first approach,” says True North Mortgage CEO Dan Eisner, in a press release last week, announcing the rate offer. “We want our customers to enjoy the lowest rates possible.  We have built our business on that model and today we are offering an all-time low rate of 2.99 per cent on a five-year fixed mortgage."

Unlike the BMO no-friller, which likely gave rise to it, the True North mortgage is “full featured mortgage with solid prepayment privileges,” although, according to the release, the offer is restricted to clients in Alberta and British Colombia.  

“We expect that first time buyers and those perhaps looking to lock in at a low rate will come to True North, not just because we have the lowest rates, but because we put our customers first," says Eisner, mum on his funding source and exact details around prepayment privileges.

Still, the deal comes as even other brokerages using lead-generation websites restrict themselves to five-year-fixed rates closer to 3.09 – 3.29 per cent.

Most of those mortgage brokerages rely on high-volumes to compensate for thinner margins in addition to paying aggregator websites for the leads they generate.

Still, more and more brokerages are turning to that formula to drive business as some real estate markets across the country cool.

The practice is not without some controversy, however, with many industry veterans concerned use of those websites reduces the value proposition of mortgage brokers to rate.

 

23 Comments
  • Rob 2012-06-19 2:50:00 AM
    Buying the rate down at a national lender is available to all brokers. So is this really where the industry wants to go? A rate war against each other to see who is willing to reduce their commission the most.
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  • Dustan Woodhouse 2012-06-19 2:55:27 AM
    I neither support the practice nor criticise the action taken.

    My comment is simply that this is not big news, rather just a simple rate buydown from the 3.09 that lenders are currently offering. Not a sustainable model for a 20 deal per year or less broker, but for one with Dan's business model and Volume it works. He is taking advantage of a situation (being a Capitalist in a Capitalist society this makes sense) that is unlikely to change any time soon.

    It is what it is.
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  • Jeremy 2012-06-19 2:55:35 AM
    There is no story here. Any one of us can reduce our commission to offer 2.99%. Why prostitute ourselves out?
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