The key is to “outsmart” the big banks, according to one broker, following one institution’s ad campaign plugging its lowest five-year fixed rate in recent memory.
“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-five bank has to spend on advertising,” Ron Butler
Butler Mortgage said in the comments section of MortgageBrokerNews.ca. “We have to outsmart; we will never out spend.”
Scotiabank is the most recent lender to jump into the market with a sub-three per cent five-year fixed rate, with its 2.97 per cent offering. It continues to be the lowest of its kind among the big-five banks.
The bank is aggressively advertising the promotion through the web and Twitter and while some brokers feel unthreatened by the latest offering, others believe now, with shrinking margins across the board, is the time to ramp up the competition.
“I think that we as a 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,” one MortgageBrokerNews.ca commenter noted. “We need to compete on our knowledge and service not rate because we will lose that battle.”
Still, the importance of competing on rate should not be downplayed, according to Butler.
“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?” Butler said.