Are the monolines competing?

Are the monolines competing?

Are the monolines competing? A number of the big banks have announced special fixed rate promotions and cuts to their prime lending rate, but what are monolines doing to ensure brokers have a competitive advantage?

“Monolines are definitely showing some super competitive pricing because they know that they have to be competitive. I think I saw today that RBC dropped their ten year posted rate and that’s huge,” Rob Campbell of Verico The Mortgage Wellness Group told “That could be a good product for some people, not everybody, but it could be a great product and if guys like First National and MCAP start to drop that down like they were offering a couple years ago, it might be something worthwhile.

“We’re definitely seeing (monolines) up the ante as far as being competitive.”

As for the big banks, Scotia currently has a special offer for a five-year closed term fixed mortgage at a rate of 3.19 per cent, and TD offers a five-year special offer at 3.09 per cent.

RBC, meanwhile, offers a seven year closed mortgage at 3.44 per cent as well as a 10-year at a rate of 3.84 per cent.

The rate wars have certainly ramped up, following the Bank of Canada’s decision to cut its overnight rate for the first time since September 2010, but it may be the big banks that have the ability to offer greater discounts.

“The banks are going to have to really take a bath on mortgages just to get the clients in the door because of all the upsells they can make,” Campbell said.

Have you noticed any particular deals being offered by your monoline partners? Let us know in the comments section below.
  • 'The' Rob Campbell 2015-01-28 10:57:28 AM
    Look Ma, I made the news! :)
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  • M.S.Hines 2015-01-28 11:31:08 AM
    Ha! Love it.
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  • Ron Butler 2015-01-28 4:17:47 PM
    I think all the big monolines will change key fixed rates once some of their hedging unwinds a bit. They also have to wait for their investors to catch up to rapid changes in the marketplace, I would bet they will all be where they need to be soon. The reality is that when bond yields are this low the relationship to mortgage rates starts to uncouple, how are lenders going to pay us, pay the hedging, handle their internal costs, service the borrower for 5 years, make a profit and keep their investors on side when the base bond yields are this low? At the low end of this spectrum yields and rates start to slip out of lockstep.
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