“I’ve had seven people email or call me about the offering and asking if I can get it,” Jake Abramowicz of Mortgage Edge told MortgageBrokerNews.ca. “When I showed my one client the limitations it was enough to scare him away, though.”
Investors Group’s rate -- a 36 month closed variable-rate mortgage at 1.99 per cent (at Prime – 1.01 per cent) is unparalleled at the moment but, according to Abramowicz, each of his clients has opted to avoid it due to the inability refinance the product.
“The product is a fit for someone who knows 100 per cent that they will not move and is 100 per cent sure rates will not move,” he said. “If someone can accurately predict the future they should take it – it’s a great rate.”
However, he realizes it’s the sort of promotion that will feed the insurance and investment arms of Investors Group.
Still, even Abramowicz admits he believes rates will remain steady for the years to come – which has forced him to question why monolines haven’t employed a similar tactic to drum up interest in the broker channel.
“If a monoline did this they would be very smart; they would gain a massive market share,” he said. “I spoke to a few today – MCAP
– and they were as surprised as the rest of the industry.”
And although he can’t compete with it, Abramowicz has found the silver lining.
“The positive is that I spoke with seven clients who I otherwise would not have,” he said. “I’m just hoping this will wake up the monolines to be more aggressive with variable rates.”
Brokers lambast IG offering
Mortgage product re-ignites mortgage wars
Reports of Investor Group’s recent 1.99 per cent three year variable rate “shaking” the industry weren't exaggerated, with lenders being caught off guard and scores of clients inquiring about similar products.