With tongue firmly planted in cheek, one brokerage is using a photo of Finance Minister Jim Flaherty
to help promote its 2.79 per cent 5-year fixed mortgage with the caption “This rate is too low for the Canadian people.”
“We were distributing the flyer at the Home Show to promote our special rate,” says Sean Binkley, a broker with Your Home Team. “We are having a pretty good chuckle about it at the office and it received lots of laughs from the Home Show, great conversations.”
The flyer, distributed at the Kingston home show by Your Home Team @ Dominion Lending Centres
, shows Flaherty cautioning Canadians about the “too low” rate, with words in larger type above: “He may not want you to save… BUT WE DO.”
The finance minister has gone on the record several times admonishing the lending community about engaging in a rate war, following BMO’s decision to post its 5-year fixed mortgage at 2.99 per cent. Since BMO’s posted rate on March 4, several banks have countered with their own matching or lower rates – the most notorious being Manulife’s drop from 3.09 to 2.89 per cent, which it summarily reversed following a phone call from the finance minister’s office.
The promotional rate offered by Your Home Team was specifically keyed to the finance minister’s comments.
“Our special rate is through Lendwise 50 bps. I normally don’t sell rate, but I was piggybacking for a short period based on Flaherty’s comments,” he told MortggeBrokerNews.ca.
As for the dangers of low rates for clients, Binkley does explain that there is a difference between qualifying to pay and being able to pay.
“We counsel our clients to pay more right away – that is pay ‘as if’ you had taken a 10-year rate, we show them how much more they can save, advise them about the rate increasing in 5 years, etc. ,” says Binkley. “There’re lots of clients I will ask to reconsider buying if they are close to qualifying; to me, qualification does NOT mean affordability.”