Rate war reignited; brokers not intimidated

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ScotiaBank is the latest lender to offer a sub-three per cent mortgage rate but one broker doesn’t feel threatened by the latest offering; even though he does realize it will bring in a fair amount of business for the big bank.

“It’s much ado about nothing and it’s just a marketing gimmick; I can always buy a rate down,” David Mair of Dominion Lending Centres NuVision Mortgage Group told MortgageBrokerNews.ca. “Even the front-five banks are fighting back and it will draw a lot of business because most people only care about rate.”

Scotia currently offers a five-year fixed rate at 2.97 per cent, which, at press time, is the lowest among the big banks.

The bank is aggressively flogging its latest promotion by taking ads out and promoting tweets in Twitter feeds. But this isn’t the first time a lender has made headline for offering a sub-three per cent rate.

Recently, Investors Group posted a 36 month closed variable-rate mortgage rate at 1.99 per cent (Prime – 1.01 per cent). And, of course, the Bank of Montreal made headlines in 2012 with its “2.99 no-friller,” which is widely considered to be the catalyst for record-low mortgage rates Canadian homebuyers have enjoyed for over a year.

BMO’s rate also drew the ire of then-Finance Minister Jim Flaherty but current minister, Joe Oliver, has yet to react to Scotia’s offering.

“Oliver looks like he’s in so far over his head he doesn’t know what to do,” Mair said.

Mair is frustrated by the constant coverage bank rates get and has called for national and provincial broker organizations to better compete with the publicity.

“We don’t have the marketing budget to go up against the banks but I beat them on rate and I beat them on rate,” Mair said.
  • Silly Rabbit on 2014-05-29 11:17:26 AM

    Banks are a joke...Scotia 2.97% big deal, brokers doing 2.89% all day long and without ridiculous IRD calcs.

    RBC with a laughable promotion for realtors, send us 5 mortgages for $1000? LOL.... brokers will give those realtors $3000....

    This industry is a joke....

  • Robbie Ryan on 2014-05-29 11:20:44 AM

    If you think this industry is a joke then perhaps you should find another one that you take more seriously

  • Mortgage Man on 2014-05-29 11:28:36 AM

    I think that we as an broker industry have to stop saying that the BIG bank offerings don't hurt us. You have to look at the state of the market and realize that volumes are down and that the banks have targets to hit. We need to compete on our knowledge and service not rate because we will lose that battle. Its all about creating a sustainable long term business plan.......not about reacting!

  • Erica on 2014-05-29 11:31:49 AM

    "Mair is frustrated by the constant coverage bank rates get and has called for national and provincial broker organizations to better compete with the publicity."

    I wish we could join forces to better market mortgage agents/brokers as a united front. Banks only know how to flash rates in front of clients because that's all they really have. We are working for the people to help them get ahead when bank suck them in with a low mortgage rate and then stick them with high banking fees and credit card interest rates.

  • Silly Rabbit on 2014-05-29 5:35:25 PM

    @ Erica

    I've been saying that for years. When was the last time you saw CAAMP or IMBA spend some money on TV or Radio ads promoting mortgage brokers?

    I don't think they ever have. That's the problem right there. What do our fees go to? A conference? Seminars? I'd rather they promote us then waste money on things that don't help us get more market share. In the end, that's what its all about. MARKET SHARE.

  • Ron Butler on 2014-05-29 10:21:44 PM

    Let's be clear on something, if we put every mortgage broker in Canada in the mix, we will never have one tenth of what one Big 5 bank has to spend on advertising. We have to outsmart we will never out spend.

    If you think rate is not important in marketing mortgages perhaps you should ask yourself the question: why do the 5 richest companies in Canada think it is?

  • Poor Mortgage Guy on 2014-06-02 12:14:43 AM

    When clients go direct to those retail banks, they get approved quicker and easier. They can get approved even if GDS/TDS is over.
    When we apply in our channel, it is totally different story.
    I got a case that the Lender required the client to cancel a LOC in TD, so my client went to TD and then TD approved his mortgage without cancel the LOC.
    It seems that bank staff can make exceptions in order to get business. This is something I cannot.

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