Ontario’s largest credit union has good and bad news for mortgage brokers: It has now bested BMO’s rock-bottom rate with its own 2.98 per cent deal. The bad news? That lender has set a 10 bps premium for the clients of mortgage brokers.
"The uniqueness of BMO's deep dive has rocked the footing of most of financial institutions," said Rick Arnds, senior manager of emerging markets for Meridian Credit Union. "We want to compete on the street and via the broker channel. We believe our offer to broker partners is second to none given the full-feature mortgage for their clients and the referral compensation."
It is nonetheless a slightly different offer than what the credit union is offering through its branches.
The lender is the first to come to the table with a rate lower on a five-year fixed than the Bank of Montreal.
The Meridian product is also fully loaded with a 30-year amortization cap and 20/20 prepayment privileges.
While those robust terms effectively answer broker beefs about the BMO offering, mortgage professionals will only be able to access that 2.98 for clients if they use a buy-down.
“Brokers feeling the need to combat the 2.99 per cent pared-down BMO offer with our full-featured mortgage are able to buy down the rate,” Arnds told MortgageBrokerNews.ca. That leaves mortgage professionals with 35 basis points, down from the 90 bps referral they’d receive selling the same Meridian mortgage at 3.09 per cent.
Considering its terms, that higher price point is still competitive with even the most aggressive five-year rates on the market, said one broker.
“That’s definitely attractive product,” Robert Clancy, with VERICO Safebridge, told MortgageBrokerNews.ca. “And I’d only use the buy-down in very rare instances when it’s that or lose the client.”