TV personality Kevin O’Leary may be tipping his hand as to what exactly his new mortgage business will focus on.
“The whole reason I am doing it is to get people locked in,” O’Leary said during a segment on CBC’s Lang & O’Leary Exchange focused on the pros and cons of renting versus owning a home. That’s “precisely why I started O’Leary Mortgages is because we sell fixed rate mortgages, it won’t vary.”
O’Leary intrigued and worried some mortgage professionals earlier this month when he released a cryptic video announcing his plans to launch O’Leary Mortgages. It fails to detail whether he intends to become a lender or a brokerage head.
His comments about offering fixed mortgages still leave that question unanswered at the same time they have attracted some broker objections. O'Leary Mortgages is set to launch late this month.
“This is a mission for me,” O’Leary said. “There will be thousands of people with variable mortgages that will be slaughtered…with fixed mortgages they’ll have five years of knowing what they’ll exactly pay.”
The strategy, however, doesn’t work every time, according to Steve Garganis, a broker for The Mortgage Centre, in Oakville, Ont., who wrote in his blog that over 80 per cent of his clients are either on or have been in variable rate mortgages.
Although Garganis would not recommend a variable rate mortgage for most new mortgages today because fixed rates are at near historical lows, he maintains that the case for persuading a client currently in a variable to move to fixed may be a difficult one to make.
“This is where I am very concerned,” he writes. “We have a very well-known TV personality that comes out and says everyone should lock into a fixed-rate mortgage,” he wrote. “There is no one-size- fits-all mortgage; everyone is different and has different needs.”