In a creative and hopefully lucrative promo set to launch later this month, one mortgage broker proposes to hand out $1,000 to borrowers who present him with a mortgage offer he simply cannot better.
“If I can’t find a way to help you save at least $1,000 on that mortgage offer, you will go home with $1,000 dollars in cash,” said Mark Norman, broker with VERICO - Acme Mortgage Professional. “This is just one of the ways I can think of to shift borrower focus from rates to savings and drum up more business in this slowing market.”
Norman’s latest brainstorm follows an earlier campaign in March of this year, which was meant to counter BMO’s now-infamous 2.99 rate. His offer was to give any client holding a BMO mortgage offer $299 if he failed to come up with an alternative mortgage that would save money.
That campaign was a success, according to the St John’s broker.
“At the end of that six-week run, we were able to convert 12 BMO offer holders into our clients,” he told MortgageBrokerNews.ca.
With the tighter mortgage environment exacerbating the winter season slowdown, Norman new plan is also meant to snatch clients from the banks. Still, he is sticking to his formula of not buying down rates, but rather uncovering savings by encouraging borrowers to increase their monthly payments strategically.
“We are using an inflation hedge calculator to advice borrowers on when they should boost their monthly mortgage payments,” he said. “If the current 3 per cent rate were to go up 5.5 per cent in five years, we estimate that we could save some borrowers as much as $7,000 over a period of five years.”
By contrast, the banks’ “set it-and-forget it” method of mortgage payment would likely result in an estimated $280 per month payment shock over the period of the mortgage, according to Norman.