Brokers to BMO: Thank you?

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Brokers are coming as close as they can to, ahem, thanking BMO for that trend setting 2.99 per cent rate – credited for a January boom and set to expire today.

“I didn’t lose a single deal to BMO because of that rate, but it did prompt a lot of clients who were sitting on the fence with preapproval to get off the fence and to make the purchase,”  Ray McMillan, a broker with Home Mortgage Consultants Inc. in Mississauga, told “I stop short of thanking BMO, though.”

He’s not alone, with several brokers reporting relatively brisk demand from preapproved and new clients following the big bank’s introduction of its no-frills five year fixed, offered at the lowest rate in Canadian history.

Brokers have been shut out of that product, igniting fears that it would undercut sales at what is usually the slowest month for originations. That simply hasn’t happened, with the tide of media attention BMO receiving over the last several weeks lifting the boats of brokers and other banks, alike.

Mortgage professionals have increasingly channelled client interest into four-year terms offered at the same 2.99 per cent. Those alternatives come loaded with the features that the BMO mortgage lack, say brokers, pointing to available 30-year mortgages and 20 per cent prepayment privileges, among other benefits.

McMillan hasn’t gone that route, continuing to advise clients to stick with the five-year term, even at a higher rate. It’s worked, he said, but also has the fact that the underwriting for the BMO product has been very conservative.

“Fewer people are qualifying for that rate,” he told


  • D on 2012-01-26 9:02:51 AM

    Ditto with this article. The BMO rate helped me snag some "on the fence" clients who simply needed a push from all of this hype and me to tell them exactly what BMO was up to. Wow my clients actually got it. Allow me to thank BMO.

  • stella on 2012-01-26 1:26:14 PM

    obviously, when there are mitigating circumstances such as those listed (30 year amortization required;or client NEEDS to be able to pre-pay more than 20%)it's not so much about rate at that point. let's be honest with ourselves; truth of the matter is, generally speaking, in a typical A deal,where the average client doesn't have 20% to put down each year, and he or she can easily qualify on a 25 year am, it's ABOUT RATE.

  • Ottawa Broker on 2012-01-27 2:28:37 AM

    Disagree 100% with Stella, it is not about rate. I regularly have clients that stay with me even though another broker or bank can beat my rate. Why? Because I am a part of my client financial future and I educate my clients so they can look at more than just rate. If Stella only sells rate, there is always another broker or bank rep that will undercut her. Sell value, not rate.

  • Monoline Lender on 2012-01-27 3:13:33 AM

    I agree Ottawa Broker. Stella, if you're a mortgage originator, that kind of thinking isn't going to keep you in the business very long. Any bank branch will beat your rate any day. You need to show the long term value Ottawa Broker talks about. Become a trusted advisor, help them with their long term financial future. Dont be a mortgage cashier. Any mortgage specialist can do that.

  • ITS About the RATE on 2012-01-28 8:39:14 AM

    If "educating" your client is about showing them apples to apples comparison on interest savings, then I find it hard for any client to say no to $890 or $1860 payments difference on typical 300k mtg with a 10 or 20 bps respective rate difference for a 5 yr term, amort 25. Value is a thin thread to hangon to. Clients expect that brokers should already come to the table with product knowledge and advice(the value) that could be help them save the most money on their mortgage giving their situation. So if 2 mortgage product is the same and one has a lower rate, is ottawa saying his can out steer client away from saving money because his "value" should come at a cost to the client. Where is the education in that?

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