BMO is now sharing details about the infamous 2.99 campaign that sparked last year's vicious rate wars, suggesting it brought in a sizable number of new clients -- customers who didn't just stop at taking out a mortgage.
Pointing to the newly released first quarter financials, bank officials attributed the great success of their 2.99 per cent 5-year-fixed rate mortgage in securing renewals and drawing in new clients.
Many chose to renew with the popular rate, said one BMO exec Tuesday during a conference call focused on Q1 results, with “40 per cent of those being new customers; and of those, BMO (cross)sold two other products as well.”
Their first quarterly financial results show an increase in residential mortgages from $81.3 billion in Q1 2012 to $89 billion Q1 2013, an unexpected jump of 9.5 per cent ($7.7 billion).
BMO is the first out of the gate with their first quarter financials, with RBC expected to release their statement later this week.
While that 2.99 per cent rate on a stripped-down mortgage was slated to close last March, it was later reintroduced and extended through direct marketing to clients.
The counter-offer from brokers was 2.99 per cent on a four-year term, although BMO is largely regarded to have made the most ground in attracting new clients during an especially competitive 2012.
Still, the BMO rate offer may have created friction within its own organization, with some road reps viewing the product as a move to squeeze them out and promote more branch transactions.