Credit union offers brokers 2.98% with strings

Credit union offers brokers 2.98% with strings

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.”
 

6 Comments
  • Kelly Rowe 2012-03-16 5:46:05 AM
    I'm glad I don't have to send my clients to Meridian. In BC, our Credit Union partners value Broker business.
    Post a reply
  • Paula Scott 2012-03-16 6:46:36 AM
    Meridian is making a mistake by punishing brokers in Ontario

    Perhaps brokers should let them know how they feel about such
    Prejudice!! Not good business etiquette
    Post a reply
  • Rob Stanfield 2012-03-16 7:57:22 AM
    Not that rate is the only issue when selling a mortgage as I believe a good mortgage product outweights a good rate, as long as the rate difference is not to substantial. But my question is this, why are broker lenders coming to the table sayin WE ARE HERE FOR THE BROKERS TO BATTLE THE BIG 5, but they aren't? We as brokers are battling the big 5 as all these lenders offering the 2.99% are requiring a substantial buydown with our bps. I would have to say that when the first broker lender battles the big 5 head on with me, and not by me giving away my income, I would have found a new lender that would probably get a large portion of my business.
    When are the broker lenders going to step into the ring and truly help us fight the big 5.
    Post a reply