Tuesday that Investors Group had launched an unprecedented mortgage product but brokers have already poked holes in the offering.
“Please note: not so ‘minor’ stipulations: fully closed, arm’s length sale. No transfer, no port, no nothing,” Ron Butler
Butler Mortgage said in the comments section of MortgageBrokerNews.ca. “Need to refinance in year three, job transfer in year two, need to do anything with the mortgage? No matter what your equity is in the house always the same answer: sell your house.”
The product in questions is a 36 month closed variable-rate mortgage rate at 1.99 per cent (Prime minus 1.01 per cent).
Investors Group’s website lists a number of stipulations but, as Butler pointed out, there are many others that also need to be taken into consideration by clients.
“If applicable, you may be responsible for legal and administrative fees or prepayment charges. Not available for renewals or internal refinances,” the fine print for the product reads. “These promotions are closed terms that are not eligible to be paid out, refinanced, early renewed or extended prior to maturity of the term (except upon the bonafide sale of the subject property).”
Other brokers drew attention the product as a mere means to drawing clients in for cross-selling opportunities.
“I know how Investors Group works, and this product will be tied to cross selling of other IG products that most people don't want,” Daniel McKay wrote in the comments section. “Brokers won't lose out on much business over this teaser loss leader offering.”