Mortgage product re-ignites mortgage wars

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Move over BMO’s 2.99 “No Friller” mortgage: A new product – from an unlikely source – is the one making waves in the mortgage industry Tuesday.

Investors Group – not one to often make mortgage news headlines – posted a 36 month closed variable-rate mortgage rate at 1.99 per cent (Prime – 1.01 per cent).

Its other offerings, including a 3.35 per cent five-year fixed rate, are among industry standards but its three-year 1.99 per cent will certainly raise a few eyebrows among customers and, indeed, mortgage brokers.

At least one isn’t sold on the product just yet.

“Investors Group’s whole deal is to get all your products so there’s got to be a catch to it. Nothing is for free and they hardball their clients to transfer all their accounts over to them,” John Panagakos of Dominion Lending Centres Home Financial told “Nothing is for free. They’re going to want three, four products per client.”

And the offer does come with a few stipulations.

“If applicable, you may be responsible for legal and administrative fees or prepayment charges. Not available for renewals or internal refinances,” the fine print for the product reads. “These promotions are closed terms that are not eligible to be paid out, refinanced, early renewed or extended prior to maturity of the term (except upon the bonafide sale of the subject property).”

The “mortgage wars” have been heating up over the past year, with a number of big banks, several mortgage brokers and at least one credit union offering sub-three per cent five-year fixed rate mortgages.

Most recently, RBC started advertising its “employee pricing” mortgage.

RBC offers ‘employee pricing’ mortgages
The 2.99 per cent five-year fixed is back
  • MP on 2014-05-13 4:51:49 PM

    There's no way we can compete with this!!

  • Daniel McKay on 2014-05-13 6:15:24 PM

    Do you work for IG MP? I know how IG works, and this product will be tied to cross selling of other IG products that most people don't want. Brokers won't lose out on much business over this teaser loss leader offering.

  • MP on 2014-05-13 6:28:30 PM

    Nope I don't work for IG. Don't really like their philosophy!!

  • Chuck on 2014-05-13 6:42:34 PM

    IG is very offensive in their practices. They charge DSC fees on their mutual funds - most people don't know what that is until they need to liquidate. Try telling a first time home buyer that they have to pay fees up front to cash in their rrsps to buy a house.

  • Ron Butler on 2014-05-13 7:20:10 PM

    Please note: not so "minor" stipulations.

    FULLY CLOSED Arms length sale. No transfer, no port, no nothing.

    Need to refinance in year three, job transfer in year two, need to do anything with the mortgage? No matter what your equity is in the house always the same answer: SELL YOUR HOUSE.

    Not so minor conditions.

  • Victor Simone on 2014-05-13 7:39:21 PM

    IG has the next two weeks till they either have other lenders come down and compete with this offer, or IG chokes on it and ends this promotion in 2 weeks. It should be fun to watch what happens, and I'm betting that IG enjoys it and then learns that they shouldn't run this kind of promo ever again.

    1. Can IG underwrite this promo ?
    2. How many exceptions do they need to make to their existing client's so they can sell this rate ? Stated or qualified ? All I know is big investment clients don't like it when you say no.
    3. Oh my, our customer wants to get out of this mortgage or he's moving all his money out....I can just hear the screaming from the IG career agents, can you ?

    Buckle up, this is gonna' be fun.

  • race to the bottom on 2014-05-13 11:37:03 PM

    BMO picked up a ton of biz with the 2.99 promo even though it was clear the product was restrictive. People don't care they just want price. IG will get a ton of Free Publicity which will attract customers and force the competition to match it or lose the biz. Now you have to buy down the rate, pay for the appraisal and throw some money at legal or give out $500 Canadian Tire bucks. One would be further ahead staying in bed.

  • Ronnie Kartman on 2014-05-14 7:44:25 AM

    I can't help but say something here. I can tell that many of you have forgotten (or don't realize) that the professional mortgage brokerage industry (with controls and training in Canada is, at best) only really began12-14 years old. (stay with me on this...) Prior to 2002, 2003, if you so much as "mentioned" the word "Mortgage Broker" to people, it was the Kiss of Death. And while many of you think that most clients are seeking the lowest rate only, you are highly mistaken. Yes, you get calls from people stuck in traffic on the Gardiner expwy (or whatever) and are "know-it-alls, etc, and your are the 10th broker they have called to get a "quick quote." This is no different than someone contacting The Renovation Co-op to just get a "ballpark price" while hey are driving. To blow these type people out of the water or try to capture them (one way or the other) …and this is only one scenario for one type of client…your response should be something like: "I’ve got tell you, Mr so and so.. Getting brokers to simply throw numbers only at you over the phone is never a good thing, because "rates" are not always what they appear to be. In fact (for example, in the case of the product mentioned in this dialogue), we just analyzed a promotional mortgage product from a major lender that we were going to start promoting, and when we came across some obvious, and potentially dangerous flaws (don’t mention the company), we stopped immediately. However, If I can't see your information in front of me, I can't do anything for you." You have at that point… in that phone call … made him/her think(and hopefully get scared), and you have given yourself a lot of credibility, and most importantly…you have taken “control ( the key thing). If you feel that he may be listening, say something like this: "I have to get off this phone right now, but I am happy to send you a personal email with some information and a link to an pre-application form. Get his name and tell him that you will look for his submission personally. Takes 2 minutes of your time and, instead of being on the defensive like a scm…k, you have taken control of the conversation without getting "tortured", which sooner or later will always affect your psyche. If he responds, it may work. If not, move on. This is what we do all day long when doing "intake" for all inquiries, and this method works for member contractors, architects and yes, mortgage brokers. If you need help with a client, I will give you some suggestions I’m happy to do it...I just hate to see people in the industry lose deals for the wrong reasons.. There are also ways to deal with even more sophisticated “big investors” if you know your stuff. BOTTOM LINE: If all you have to fight with are rates, you are not doing your job. The whole idea of your profession is to gain a client’s confidence that you will be the one to look after their mortgages for the rest of their lives. Everyone (including their employees) hate the banks for one reason or the other. You had to focus on educating your clients about how personal it is what you do. There is no question that this is not an easy task, given the “conditioning” power that banks have throughout Canada. But if you want to gain lifetime clients, you have to (from the get-go) tactfully (another key word) make them feel that you are (and will be, 5 years from now) PERSONALLY watching their back…and not just sit there (while they control the conversation) listening to them simply ruin your mood by talking “rate” only and wasting your time. Even when things are slow, it is always best to not “chase” after people. BOTTOM LINE, LADIES AND GERMS (GOD, I’M GETTING OLDER) YOU ARE IN INDEPENDENT SALES BUSINESS, AND YOU AIN’T WORKIN’ FOR THE BANK NO MORE!) Happy Hunting. Sincerely, Ronnie Kartman The Renovation Co-op
    The Canadian Renovation Funding Program

  • Silly Rabbit on 2014-05-14 7:56:26 AM

    NEVER apply for a mortgage where you can't refinance, transfer or port. Some really stupid people are gonna get pissed off after they sign up for this mickey mouse product. IG is a joke, the bottom of the financial planner barrel. Have you ever seen the people that work there?? They hire they're gonna be hounding these new mortgage clients for their investments, so they can make fat fees off them. This promo won't last.

  • Ronnie Kartman on 2014-05-14 8:07:43 AM

    To Silly Rabbit: As I mentioned above, the idea is to talk to potential /existing clients about the flaws (in this particular product) in a way where you gain credibility but do not overly "attack" the competition. I hate to make comparisons, but when we are screening clients for either general contracting work, architectural work, or where they simply want access to our own broker-members, we have to be careful not to directly criticize their existing or other contractors, designers, or mortgage brokers, as it will surely ruin our own credibility. Just very light "taps" or "jabs" over specific things if it makes sense to point them out. Again, this is about sales, not just your product knowledge.

    Ronnie Kartman
    The Renovation Co-op

  • Ron Butler on 2014-05-14 8:58:40 AM

    Mr. Kartman, thanks for your well meaning post but most of the people who read this board have been doing mortgages for a long time and we all actually do know how to speak to consumers. Frankly, you mainly work in a business where the price is a moving target dependent on the work being done. The rates we work with are set in stone. You are correct that great knowledge and service help to make deals happen. But our world is not a kitchen reno.

  • Ronnie Kartman on 2014-05-16 11:50:01 AM

    Ron: As probably one of the most vocal proponents of independent mortgage brokers you will find anywhere, and because I enjoy viewing this forum from time to time to gain broker/agent opinions of new products, and because I have a lot to offer through over 25 years of experience, I must to respond to your “encapsulation” of what it is we do here, and (both jokingly and respectfully) CORRECT THE HELL OUT OF YOU!

    This response in no way meant to be any solicitation or arrogance on my part, but perhaps to display that I am quite qualified to be part of any of your forum discussions, and because it is in my personal nature (as reflected in our nationwide business model) to communicate with and support and help anyone where I think I can.

    My "world", (which is my company), is a professional membership organization consisting of general contractors, architects and a handful of selected mortgage brokers/agents, and acts as a combined marketing, facilitation and fulfillment organization. Part of our role is to very meticulously pre-screen clients who contact us for not only renovation-related mortgage requests, but also for strictly mortgage related requests(eg private mortgages for debt consolidation, power-of-sale.foreclosure, CMHC Purchase-Plus and Refinance-Plus Mortgages, Commercial Mortgage Financing for commercial renovations, etc. all with the goal of hdning off clients who will offer the highest sales closing rates and funding ratios. And while that I agree that there are many brokers and agents who are very well versed in dealing with consumers (such as you must be, as I am familiar with your name from at least 10 years ago..) I have spoken to dozens and dozens of newly (and not so newly) licensed mortgage professionals who are incredibly lacking in basic sales skills, marketing their own services, etc. (especially those that have had previous career backgrounds working strictly for the banks). And there are plenty of these individuals that are part of your industry). The basics of pre-qualifying clients that apply to all sales skills are absolutely universal to just about everything…renovation sales, service-related sales, financial-related sales and yes…even mortgage–related sales. And when I read through this forum at times, and hear the whining by some individuals about how some banking products will do this and that to the mortgage industry, etc. (which may be partially true) and I sense the self-defeat and frustration within many of those comments, I simply can’t help myself but to comment and put forward whatever I can to help (without sounding overly condescending)

    Think my world is simply a "Kitchen Reno?" I think not.

    Happy Brokering!

    Ronnie Kartman
    The Renovation Co-op

    The Canadian Renovation Funding Program

  • Ron Butler on 2014-05-16 12:03:09 PM

    @ Mr. Kartman, respectfully I am sure you are wildly successful at your company and I can agree with you that there are a great many mortgage agents in Ontario who may be under-trained or are newly minted and need guidance.

    My point to you is there are a huge number of sophisticated clients who are doing there third purchase or renewing their mortgages for the fourth time and those folks typically are focused on dollars and cents, contract provisions and fees to be covered. These things become a business transaction and there is relatively little need for sales strategy and tactics. Value, speed and competence win out with that group. There is little "salesmanship" required.

  • Ronnie Kartman on 2014-05-16 12:53:51 PM


    I would never pretend to be "wildly" successful (thanks for the sarcasm) as we grow, it has been a long and painful road getting to this point. And you are right..and I agree that there are likely many sophisticated clients within both yours and other more sophisticated brokers and/or agents' portfolios. However, I am only responding to what I have read within the forum over the last year or so, and the bulk of what I have read does not indicate to me that the clients you describe represent the majority of what the remaining brokers encounter. Anyway, I will try to qualify my comments when responding to a specific topic. Fair enough? Over and out Back to keeping the fires going. Ronnie Kartman The Renovation Co-op/The Canadian Renovation Funding Program

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