True North answers critics

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True North’s 2.99 per cent offer was in no way a “loss leader,” says the company’s owner, suggesting it’s leading sales in markets where offered.

“We believe in the Walmart philosophy of everyday low prices,” Dan Eisner told “We don’t pick and choose who we give the offer to, and it has never meant to be a loss-leader, in fact, it has led sales over the time it’s been available in B.C. and Alberta.”

The brokerage, relying on a heavy Internet presence to drive business to several upscale storefront locations, experienced a rush of traffic in the weeks leading up to the new mortgage rules. The timing makes it harder to gauge just how many of those deals were initiated because of the offer  and not the media blitz surrounding the tighter mortgage rules.

Eisner’s comments – meant to address critics of buydowns – follows the company’s announcement last month that it would hawk its own offer of 2.99 on a five-year fixed – becoming what it bills as “the first Canadian mortgage broker to break the 3 per cent threshold."

The full-featured mortgage offer – exclusive to Canada’s two most western provinces – is being funded through Street and First National, with Eisner relying on buydowns to effect it. He isn’t disclosing the exact impact of that reduction on his commission.

But unlike the majority of brokers who use that same sorts of arrangements to protect a deal, or keep a client from going to a competitor, True North has committed to making its 2.99 offer available across the board and to all qualifying clients in B.C. and Alberta.

There’s growing concern among many that the willingness to heavily promote bought-down rates as a rule and not the exception will ultimately devalue brokering in the eyes of consumers.

Eisner argues that his own buydowns still allow him healthy return – one more in keeping with historical remuneration values.

Still, the tighter mortgage rules ushered in this week may ultimately test his resolve to keep the 2.99 offer, said one analyst Thursday, pointing to True North’s focus on volume – something that may be harder to come by in a rapidly cooling market.

Eisner doesn’t necessarily disagree.

“The effect of the mortgage rules does concern me,” he told

  • Jason on 2012-07-13 4:00:59 AM

    All the power to Dan, business is business and if he chooses to do so then so be it. Free market system. Some clients ONLY care about rate and if that is the case he is servicing their needs.

  • JJ on 2012-07-13 4:02:07 AM

    We have been offering 2.99% for a while now, starting back in December. Without buy-downs.

  • DD on 2012-07-13 6:29:32 AM

    yeah right may have had 2.99 but on a 2, 3, or 4 year, not a 5 year paying 80. If you do, why dont you tell us who its with.

  • Lew on 2012-07-13 8:32:19 AM

    I believe in free enterprise and Dan's right to market however he sees fit.

    I also believe that cutting commission to get more business is a slippery slope and once you start (if the client is aware) you will be forced to repeat time after time.
    Never say never, but at this point, not a path I will follow.

    Walmart was referred to in the article as well. If you look at Walmart's business model they take as much of their manufacturing as possible offshore to drive down their costs and then beat upon their local vendors for better volume pricing to keep their profit margins.

    Instead of pointing the finger at each other, we should be strengthening our co-ops (Verico-DLC-Invis etc) and arming them with better unity & negotiating power with lenders.

    Based on past pricing, there is plenty of room in the bond rate spread to push the rate under 3%.

    But do you really want clients that are rate driven?

  • David Larock on 2012-07-13 9:12:53 AM

    I have no problem with brokers who base their business model solely on having the lowest rate – to each his own. I just don't think we should laud their “success” or hold them up as examples to be followed. Who cares if you did $100 million in volume if you dropped your pants to do it?

    The brokers I admire offer their clients excellent rates but also great service to match and interestingly, you never hear them brag about their “volume”.

  • Derek Rowley on 2012-07-13 12:15:38 PM

    Kudo to Lew and Dave Larock

  • Not A Broker on 2012-07-14 7:41:30 AM

    Honest question - If you're offering me the same mortgage with the same lender without the buy-down, why should I go with you over True North? I've never gone to them for a mortgage, so I am not familiar with their service/knowledge etc.

  • Bill Jones on 2012-11-24 5:37:06 AM

    Mimicking Walmart's "philosophy" is not necessarily a good thing:

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