How low can you go – 2.84

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Jim Flaherty needs to “stay out” of the affairs of banking, say mortgage brokers, as one channel lender throws down the gauntlet with the introduction of a 2.84 per cent rate.

Jim Flaherty needs to stay out of banking,” says Scott Dawson, a mortgage broker with Verico, Paragon Pacific Mortgages and regular panelist on “We need real posted rates to better protect the client from IRDs and penalties.”

XCEED tweeted yesterday that it was dropping the advertised Simplicity mortgage to 2.84 per cent with a 90 bps commission from 2.87 per cent, applying downward pressure on posted rates and seemingly choosing to ignore the example set by Manulife earlier in the week.

Manulife had dropped its posted rate on Monday to 2.89 per cent, but subsequently reversed itself, bring that five-year fixed back to 3.09. That was only after an official from Finance Minister Jim Flaherty’s office contacted Manulife, expressing the minister’s dissatisfaction with the new rate.

Flaherty later expressed his satisfaction with Manulife’s change of heart, stressing the need for the major lenders not to fuel a springtime rate war, thereby overheating the housing market and increasing householder debt. XCEED’s new lower rate coincides with today’s federal budget.

Still lower rate offers posted on are available from The Mortgage Emporium (2.74 per cent), True North Mortgage (2.79 per cent) and Safebridge (2.84 per cent).

For Dawson, it appears that Ottawa was picking and choosing who they were targeting to chastise.

“I don’t know why they are picking on (Manulife). I mean, the rates posted by ING were 2.98 even before BMO listed at 2.99,” he told “But really, it isn’t the rate that is gonna kill you as a homeowner – it is the penalties from those deals signed by clients at a lower rate, then who are stung down the road by the IRD when they try to refinance or move their mortgage.”

Small Business Minister Maxime Bernier publicly criticized Flaherty yesterday, telling Parliament Hill reporters that the minister “overstepped his bounds” by having his office phone Manulife asking for the lender to return to the 3.09 rate.

Peter Aceto, CEO of ING, has spoken out several times on the government involving itself in the affairs of banks, and although surprised does understand the need for the minister to set the tone for the major lenders.

“It’s a shame that the government feels it has to get involved,” says Aceto. “You hope they get involved in the best interest of the people. I am surprised that Flaherty weighed in on this.”

Aceto does point to last year’s regulation tightening on first-time buyers and underwriting as “a good thing,” and argues that some banks have been too aggressive on rates.

“Banks are pushing the regulations to the limit,” he says. “BMO is the one who started this trend; we (ING) have chosen not to follow (BMO) for two years in a row.”

Aceto sees Flaherty acting more like a shareholder by directly confronting the banks on reducing rates, speaking up after his public dissatisfaction with plummeting rates went ignored by some.

“We now have the lowest mortgage rates in the history of this country, but a line has been crossed by posting below 2.99,” he says. “It is a fairly significant move on Flaherty’s part, but he is telling them that the government is a stakeholder in how the banks operate.”

Messages and emails to David Marcotte, VP of Risk Management and Mortgage Administration, and Director and Chairman of XCEED Ivan Wahl could not be reached for comment.

  • Bill Jones on 2013-03-21 9:36:48 AM

    I wish there were more details in these quoted interest rates: Are they for convnetional? Insured only? Available for switches? Do they allow extend amortizations on convnetional? Available for pre-approvals? Live deals only? Do they allow float downs? Rentals or just residences? Do you need a certain beacon score? 30, 60, 90 or 120 days rate hold? etc., etc. All rates are not created equal. However I bet the Government doensn't know the difference (they, like the public, only see the advertised rate). I think advertising interest rates that have a lot of stipulations is misleading - nothing more than bait and switch.

  • Paul Therien - CENTUM on 2013-03-21 10:00:46 AM

    CENTUM Primo is at 2.74% and has been for a while. The product has great pre-payment options. If we have been offering this product for several weeks, I do not understand what the big deal is about 2.99, 2.94, or even 2.89...

  • KL on 2013-03-21 10:07:40 AM

    I agree Bill . As we all know lenders have 30,45 and 60 day Quick Close programs ! Then there are lender status provisions to go lower, then of course as Jim says conventional or high ratio. If the broadcasters of these rates are not specifically explaining all, then they are "Bait n Switchers" which we see all the time and our governing bodies should stop this crap. Then there are the buy down dudes who believe they can beat the next guy on just VB. A numbers game it is, but we are raping each other. Mr. Flaherty already messed things up with the LTV refi cutbacks, now he wants to tell all what lenders should charge !! C'mon man - back to the rock !!! Please ....

  • Gerald Carter on 2013-03-22 10:12:04 AM

    Jim Flaherty should focus on what the banks charge on credit cards and not influence the banks on what they charge for a mortgage rate.

  • Snowman on 2014-08-19 11:23:26 PM

    The real cancer to household debt is not the lower mortgage rate in Canada, it is the senseless cost of living for people on tax, insurance, utilities, property tax, etc. I would love to see a 1% mortgage rate by 2015.

  • JohnD on 2014-12-11 5:10:46 PM

    Of the 3 firms listed offering those low rates, the only reputable one is True North. Mortgage Emporum is an online broker only with no offices and Safebridge, never even heard of them. Safebridge who?

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