Brokers are describing RBC’s newly launched Rate Match campaign in less than glowing terms, pointing out the exclusion of monolines as evidence of a broker’s skill at finding the best deal.
“It’s all smoke and mirrors; they know that the monolines have better rates,” says Brian Nason of Mortgage Architects
in Hamilton. “The average consumer is very aware of the monoline rates and is extremely rate conscious. Underestimating the consumer is definitely to our advantage.”
RBC launched the Rate Match campaign this month, promising to match the mortgage rates of 10 Canadian financial institutions – the majority of which are closed to mortgage brokers, and none of which are monolines.
“RBC doesn’t want to be bleeding cash, and they are accountable to the shareholders,” says Jason Friesen of Verico
Premiere Mortgage. “I think they realize that brokers should be able to get the same rate or better. The banks have to maintain a threshold of profitability.”
“They are making the client go and do the work for them, finding the best rate,” says Friesen. “If I am going to do the work myself, why should I stay with RBC if another lender has a better rate?”
For mortgage associate Shawn Selanders in Alberta, RBC is simply focusing on rate.
“It speaks volumes of the lender,” says Selanders. “They (RBC) are not stepping up to the plate, but providing the lowest rate after the fact. If they want to offer the best rate, they should offer it up front.”
It is the latest move among the major lenders to seize a larger slice of the mortgage renewal pie, countering BMO’s 2.99 per cent 5-year fixed rate announcement earlier in the month. It is also another body blow to mortgage brokers, who are finding it difficult to go toe-to-toe against the banks without giving back bps on commission.
“All is fair in love and war,” Selanders told MortgageBrokerNews.ca. “But it isn’t good business.”
As Ontario’s Friesen sees it, the banks typically lavish deals and attention on a new client to secure their business, only to stick them with regular rates once the special rate has expired.
“Like any bank, once you are in the door, there are no more special rates,” he says. “That’s the difference between mortgage brokers and banks – a bank is never going to tell you the benefits of a variable rate.”